Should you manage a
property yourself, or hire a property manager? And that’s today’s video. Let’s dive in. Hey, everybody,
I’m Clayton Morris. I’m the founder of Morris
Invest, a turnkey real estate company. I’ve been a real estate
investor for a number of years, and have rehabbed
hundreds of properties. This channel is
focused on helping you create passive income
and creating legacy wealth for you and your family. I’ll give you great
tactics and strategies so you can go out there and take
action and become a real estate investor. Today, we’re gonna talk
about whether or not you should manage a
property yourself, or whether you should
hire a property manager. This morning– and the
reason I’m thinking of this is because this morning,
I received an email from a watcher of our
YouTube channel here. And he sounded
pretty despondent. And he said, look,
my wife and I, I think we’re pretty
terrible landlords. My wife thinks we’re
terrible landlords. And I think they own about
three or four properties. I think they’re free and clear. And they’re just having
trouble renting them. And in two of the
properties, they have tenants that aren’t paying. But he made, like,
a paragraph excuse for why they’re not paying. You know, they’re behind
on their payments, but they say they’re gonna
pay me, but they’re behind, but we keep thinking they will. I was like, ugh. And so I wrote them back and I
said, no, look, first of all, here’s the thing,
your wife is correct. We are all terrible
landlords, and we shouldn’t be managing our own properties. That’s number one. Number two, I said, don’t
be so hard on yourself. This is a learning
experience, right? They’ve got these
properties, they look fantastic and
renovated, but they’re having them managed by themselves. He’s putting out
ads in newspapers, he’s putting ads
up on Craigslist or whatever he’s doing, and he’s
not getting the phone to ring. A number of things
could be wrong, right. The rent could be too high,
the location could be weird. Whatever it is, he doesn’t
have a property manager. So, when you’re
sitting back thinking about breaking into
real estate investing, I want to use that
as a cautionary tale, because I would never
manage my own properties. I’m gonna repeat that. I would never manage my
own rental properties, for a number of reasons,
not the least of which is I don’t want a phone call
at one in the morning because a toilet has overflowed. But I don’t know the first
thing about whether or not I can– you know, the vacancy
rate in this particular town, or why we should rent this
property for $700 a month versus $675 a month, because
the one around the corner is slightly larger, that’s why–
you know, all of those factors play into this. And it’s so important to be able
to have a property management team that can go out,
can collect the rent, they can do a full
background check on a tenant, they can screen them, they
can check for eviction history to make sure we’re not
renting to people that have evictions on their record. All of those things, that’s
what a property management team does. And here’s the thing. If you watch my videos
on return on investment, or ROI– a little card
is gonna pop up here. You can click on those
and watch ROI next. The reason we factor– the reason we take out
40% in our formula in ROI is because we’re factoring
in the property management cost, which is usually
about 10% a month. So, we build that
into our formula so that we know
that we’re making a great return on
our investment, including the fact that we’re
paying a property management team to do all of
our tenant screening and placement of the tenant. I love working with a
property management team. I don’t ever want phone
calls from a tenant. They don’t even know
my phone number. I don’t want that
to ever happen. And neither should you. But look, it’s a
learning experience. And so this husband and
wife, they’re just learning. They’re trying to
do it themselves, probably to save a few dollars. And quite honestly, they’re
just doing it wrong. There’s nothing wrong with that. Turn those keys over to a
property management office, and get them to rent
those properties. They’re gonna know that they
can increase rents every year, or not. They’re gonna know the
going rate of return on that particular property. They’re going to know
when that tenant is going to be able to pay their
rent and take care of it. They’re gonna know
the best places to advertise for that tenant. They’re gonna know
the best contracting team to get in there and
make a slight repair at one in the morning when
there’s a slight problem. All of those things
are the power of having a great
property management team. So, if you’re thinking
about doing it, I’m telling you, I’m warning
you right now, don’t do it. Don’t do it. And you’re also creating
another job for yourself. That’s what people
don’t think about. You take on the role of
being the property management office like this couple, you’re
responsible for marketing now. You have to become
a marketing expert. Are you a marketing expert? You have to run
software and keep track of rents
that are coming in, and expenses for that
particular property. Are you a CFO? Do you want to manage
all of that stuff? You have to go out and
actually screen tenants. Do you know how
to screen tenants? Sure, you can do some online
paperwork and things like that, but are you really good at that? Are you sure you’re
getting a quality tenant? Are you going to
collect rent on time? Are you going to go out every
weekend and knock on their door and ask for the rent? Are You gonna have an
automated system in place so that rent comes in
consistently across time? Again, when you take on the
role of being the property management team,
you are creating another job for yourself. So, think about the
lifestyle that you want, and reverse engineer that. And I would say,
if you’re trying to create passive income,
that’s not passive. You’re creating another
job for yourself. I hope this video was
insightful and helped you wrap your head around
the beauty of working with a property management team. I’m trying to beat it into
certain people’s heads out there. Let me know your thoughts
in the comment thread below. You can also subscribe
right here to my channel. We love having you subscribe,
because we publish videos multiple times a week here
around real estate investing. And we have all kinds
of other playlists to help you get started buying
that first rental property or expanding your portfolio. Thanks so much everyone. We’ll see you back
here on another video. Go out there, take action, and
become a real estate investor.

Should You Hire a Property Manager?

15 thoughts on “Should You Hire a Property Manager?

  • February 4, 2017 at 3:21 am
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    will I be able to purchase a property from your company?

    Reply
  • March 17, 2017 at 2:17 am
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    You are very knowledgeable, clear and concise with your presentation. I'd love to work with you on out of state ventures in the near future!

    Reply
  • May 16, 2017 at 2:10 am
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    dude u my 3rd most looked up business role models

    Reply
  • May 16, 2017 at 2:11 am
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    #1 is Mark Cuban
    #2 is Robert Kyosaki
    #3 is Clayton Moriss!

    Reply
  • May 30, 2017 at 1:22 am
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    Do you have any videos talking about how to choose a GOOD property management team? As a beginner it may be hard to know what to look for to avoid the bad ones, including their scope, quality, and price of work. Thanks!

    Reply
  • August 2, 2017 at 1:08 am
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    Hi Morris are there any tax benefits from using a property management company?

    Reply
  • August 2, 2017 at 7:43 pm
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    I'm learning
    A property management company will demand more respect. Tenants aren't inclined to play the emotional games as much as with a management team as with a landlord.
    Real

    Reply
  • October 18, 2017 at 12:02 pm
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    This couldnt have come in a better time

    Reply
  • January 1, 2018 at 1:59 am
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    I'm very close to buying a condo to rent out in Los Angeles. Do you know someone there that can manage it for me?

    Reply
  • February 10, 2018 at 6:15 pm
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    My Dad's managed his own properties for years (about 40 units). I've always asked why he doesn't use a property management company and he says they're thieves that do nothing but produce bad tenants and another bill. I was curious to get your take.

    Reply
  • February 23, 2018 at 3:45 am
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    Hey, i have an question that if i open a new company and start investing in real estate i don’t know how to use the software in the office does property manager know how to use these all type of software… thanks a lot you are giving me bunch of knowledge about real estate ….

    Reply
  • May 3, 2018 at 2:03 pm
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    Thank you so much my friend, once were debt free we will start investing in real estate.

    Reply
  • May 18, 2018 at 5:13 pm
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    So do you have to pay extra for every time they repair and maintain your property or only 10% ?

    Reply
  • January 29, 2019 at 5:42 am
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    Nice and informative video .

    Reply
  • April 13, 2019 at 2:26 am
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    Very good video

    Reply

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