At What Point Does It Make More Sense To Self-manage?
I have a management company that specializes in fee management of other people's investment property....specifically multi-family stuff (40 units to 300 unit props.). The problem we are running into is one of our owners is considering going to self-management. They have about 8 properties that have 550 units spread out all over the state. They are developers/builders so the only thing they are not doing currently is the day-to-day management. They hire us that.
I have tried to tell him that we will always be a cheaper option for him vs. doing it himself, but I don't think he's buying it.
Does anyone have a rule of thumb for a situation like this? Is there a certain amount of units where it makes more sense to run them yourself?
Thanks
With that many units he has the money to start his own management company. I would try selling him on the liability issues, experience in the field, and tax breaks. Also you need to find out why he is switching first, then solve his fears or issues regarding the switch. If he is still adamant about switching out, just make sure he knows you are still available to him if (or when) he changes his mind. Nothing is better than a returning customer.
Good Luck,
Kyle
Yes you need to find the root of the problem why he wants to leave. If it is purely a money issue to him you may want to give a convincing argument about how much managing his units really takes. If your company keeps a log of all activity, show that ot him. Time is someone's most valuable asset.