Are You a Landlord , Property Manager , or Investor ? Here ’ s How to Tell
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By David Lindahl
If you are buying and holding multifamily properties , you may wonder whether you ’ re a landlord or an investor doing property management .
Having been an investor acting as a landlord ( by managing my own properties ) and currently being an investor practicing property management , I can tell you that the mentality of an investor who is a landlord is vastly different from an investor who is practicing property management .
When I bought my first threefamily apartment building many years ago , I was the manager , maintenance man , plumber , carpenter , leasing agent , housekeeper , you name it . If it had to be done , I did it . I was a landlord . This went on for three and a half years , as I acquired more 36family buildings .
I documented one procedure after another until finally I hired an office staff and gave up daytoday control of the properties and began to oversee the systems that I now had in place . I had transitioned into property management .
THE PROS OF BEING A LANDLORD
Managing your own property and being a landlord does have its benefits . The main one is that you have total control over your property . You know exactly what your tenants are doing , what your exposure will be at the end of the month , what marketing is the most effective , how your cash flow is running , and how your expenses are doing .
In addition to that knowledge , you have high control over that cash flow ; you collect the rents , pay the bills , and have your finger on the pulse of the
" I can tell you that the mentality of an investor who is a landlord is vastly different from an investor who is practicing property management ." action because everything goes through you .
Another benefit is increased cash flow . With the average management company charging 10 % of gross collected rents , that ’ s real money that you are not paying out of the property , with more money in your pocket at the end of each month .
You have absolute control over expenses ; you decide what repairs will be made when . You may even do the repairs yourself to save more money . For repairs that require contractors , you meet with the contractor , get the bids but more importantly , you get a gut feeling as to the character of the contractor and whether or not you want to do business with that person . You build personal relationships that can pay off down the road in potentially better service .
Most landlords that I know are in that position because they don ’ t want to give up the control . If they hand over their baby to a third party , how will it possibly be managed with as much care ?
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