Realty411 Magazine Featuring Lee Arnold from Cogo Capital | Page 68
“But if it’s not something you want to commit to and if
you don’t have a plan to succeed, then you’re planning to
fail. That is why landlords are among the highest sued
individuals in real estate, because they don’t go into this
with a business plan of how to succeed year after year.
They’re so focused on the purchase they never think
about the month to month...they always look at the ROI
and the cash on cash return and look at all of these big
numbers, but what they never think about is how do I get
those numbers in my pocket?"
Whether you have one or one hundred plus properties,
Steve says it all boils down to one thing...treating your
property investing efforts like a business.
“If you have one property or you have 50 properties,
you own a business.”
“It has profit, loss, income, expenses, legal obligations
...and you know the tenants that live in your property
have rights. And as an owner, you are obligated to protect,
to make sure that you’re working within the confines of
the law. So yes, you could manage your own property as
long as you’re willing to commit the time to educate
yourself on the laws and regulations, fair housing ,
discrimination, etc.
“Here in Texas, we have Texas property code, so these
are all the things you need to think about if you’re going
to self manage one...50...100 properties, it doesn’t
matter...a business is a business.”
What to look for in a property manager
Having a conversation with a prospective property
manager is one of the best ways to zero in on the company
that will be your partner in success.
“I would first make sure that your business model
aligns with the property manager’s business model,” said
Steve. “By that I mean, do they manage properties in the
same price point that you own a property in?
“If you want to be a “handsoff” property owner, do
they want you to be “handson?”
“I think it’s very important to have an initial meeting
with the property management company and set the proper
expectations with them, meaning what is it I can expect of
you and what is it you expect of me?”
“A lot of times people go with the cheapest property
management company and then they end up realizing that
cheaper isn’t cheaper...it actually becomes more expensive
because the company may be cutting corners, cutting
costs, when for an extra dollar or two dollars a day you
could have had a reputable property management
company that is aligned with your business goals.”
68