You’re the property owner. Does that mean you do all the maintenance? Find your own tenants? Make sure all the paperwork is in order? Fill out your own taxes?
There are lots of ‘hats’ to fill and as the property owner you get to decide which ones you want to wear. The more units one owns, the more landlords seem to delegate out the different jobs, so small landlords tend to wear a lot of the hats while larger landlords fill more of a CEO role.
So how do landlords, especially smaller ones with a more limited budget, figure out what they can handle and what they should hire someone else to do? Trial and error, really.
Erik isn’t much of a handyman and after trying to do some of the maintenance work himself, decides he will do the small jobs with the help of YouTube, then he finds a reliable professional who will come in and do more complex jobs for him.
Mandy has always hated doing her own taxes and on top of that worries she’ll miss something, since property and business taxes are more complicated than personal taxes, so she pays someone to do the taxes instead.
Then there’s Aubrey, who didn’t know a thing about updating properties, but after buying a particularly rundown duplex, discovered she enjoyed that aspect so always does that work herself.
Once you’ve figured out the personal role you want to fill with managing your rental business, you need to decide to what degree your residents know what your roles are and what access they have to you.
Sound confusing? Let’s explain with a story.
Thaddeus owns four units. He is his own property manager and does most of the maintenance. At 2 o’clock in the morning he receives a call from a resident that their parking spot is blocked. He gives them permission to use his spot until eight. Later, when he has almost fallen asleep, they call again to say they are locked out of their apartment. Would he please come let them in?
This deals directly with resident access to you. For emergencies, it is important for residents to have someone to contact, but neither of these instances would count as that kind of emergency. Some landlords have a separate phone for business and set it up to only receive text messages during certain hours. In this case, Thaddeus has arranged with one of his tenants to be an on-site manager who will take care of minor issues between 7pm and 7am for a reduced rent price. He has also given his residents community contact information for real emergencies, like fire or burglary.
But the story doesn’t end there. Since the tenants know Thaddeus both manages and owns the units, they often ask him for special favors. The tenants in Unit 3 continually ask him for more time to make late rent payments. The tenant in Unit 2 wants permission to punch out a wall since she ‘will be there a long time and wants a bigger open space.’ When he tells them ‘no,’ they get mad.
This deals with to what degree your residents know what your roles fill. It’s perfectly normal to manage your own apartments, but it’s also not uncommon for landlords to keep this information from their residents. They simply tell the tenants that they manage the apartments and if they have any complaints they will talk about it with the ‘owner.’ This works because Americans love having someone to blame, whether they actually know the person they’re blaming or not. So when Thaddeus decides that the Unit 2 resident can’t punch out a wall, he can tell her, ‘Sorry, I talked about it with the owner and he said there are no exceptions to tenant remodels, as clarified in the rental agreement.’ She has someone to blame without being directly upset with Thaddeus, doesn’t insist he can change the rules if he wants, and Thaddeus can put his foot down with less resistance.
It’s a nice perk, getting to decide what you will be responsible for in running your properties, just don’t forget that you also need to consider how it will play out down the road.
