Without a doubt, shifting the day to day management of my rental properties is the right thing to do. Just in the last week I have experienced first hand the perils of trying to do things myself while living 600 miles away.
In the first case, I am dealing with a drug addicted tenant who also is a compulsive liar. He started getting behind on his rent months ago. The problem was, until the first of March he was regularly giving me part of the rent. That, along with lie after lie after lie about what's about to change to get him caught up, convinced me to be lenient. Since the last week of December I was promised that the tenant's tax refund would be given to me in its entirety to make us square. That never happened. This was the first townhouse I selected to hand over to a property management company. While I have signed all the paperwork to get started, I promised them an empty house before we kick things off. Unfortunately, my problem tenant isn't budging. The latest excuses have been about why he has yet to move. Around the first of April, he was packing everything and promised he would rent a moving truck when he got paid on the 10th. Then when the 10th came and went, the new landlord had yet to install the toilets in his new place. Once the fictitious toilets were installed, my tenant came down with a mysterious illness that kept him bedridden for days.
Last week I filed an unlawful detainer lawsuit at the courthouse. It sucks that I have to pay $263 to get this thief out of my house. That's $263, plus more lost rent until he finally decides to get out.
On a lighter second example, one of my tenants wishes to move a few months before her lease ends. This is a mutually agreed upon move. My tenant is current with her rent, so I hate to lose her, but I also understand why she must move. She agreed to help me place my next tenant, so I have been able to show her condo without even being present. The situation has worked out nicely - my new tenants were able to tour the condo, ask questions of the current tenant, and communicate with me by phone. I emailed a lease, which they signed, scanned and emailed back. So far, so good. They are supposed to make the deposit to my bank account today and pay the first month's rent before the lease takes effect on May 15th. Hopefully there are no surprises I have overlooked with doing things this way.
I do have a couple of concerns with hiring a property management company for my lower end properties. First off, with lower end properties, you will rarely find a tenant with flawless credit. These tenants also tend to live month to month with no emergency funds, so when they lose their job, chances are an eviction will follow shortly. Because I've been flexible, I've kept vacancies minimal. A vacant home is a money loser for me. Will the property management company hold out for several months in search of a tenant with better credit? The other concern I have with turning over the keys is the loss of control I have over repairs and maintenance. Perfect example: I've had one of my higher end properties under professional management since I bought it in 2009. One of the toilets broke early last year. The management company was going to charge $250 to replace it. I paid $68 for a new toilet and replaced it myself. Will this be a recurring theme when I use a management company for all my properties?