Steve Rozenberg is the VP of Investor Education with Mynd Property Management, and he asked Brandon Graham, the Portfolio Manager of Phoenix Operations with Mynd to talk about some of the common issues and challenges that face Phoenix real estate investors and landlords.
The topic they’re tackling today is whether it’s important to have a Phoenix property management company manage a rental home in this market.
Managing a Phoenix Rental Property is Time-Intensive
You might expect the answer to this common question would be yes, but actually, you don’t have to have a professional property manager if you own a Phoenix rental property.
However, you need to know that’s a time-intensive process to manage your own income-producing property. Many people think that it will be easy to manage their own rental home. But, there is considerable time and expertise that needs to be invested, especially when the property is vacant or when things are in flux for one reason or another.
Maybe you have a good resident in place who is paying rent on time and there is no maintenance necessary. That sounds like a pretty easy tenancy, but it’s not usually like that. There are a lot of moving parts involved in the effective management of your home.
So, you don’t need a property manager, no. But, if you decide to manage on your own, you’ll need to be prepared to:
Answer that call from the tenant at 3 a.m. because the plumbing is backing up through the toilet at the house. Then, you’ll need to get someone out there to resolve the situation as soon as possible.
Make sure you know what to do if it’s the middle of summer and the air conditioning stops working but you can’t find a vendor to fix the problem right away.
Emergency responsiveness is only one of your duties as a self-managing landlord.
Phoenix Landlord and Tenant Laws
The Landlord/Tenant Act is a 47-page document.
You’ll need to know it line by line because if you don’t, residents can take advantage of you. They could find a loophole and take you to court, and then you’ll lose thousands of dollars just because you didn’t know the law thoroughly.
If you’re going to rent out a property without the help of a Phoenix property manager, do the research that’s required to stay compliant. Gather a good network of vendors who can respond to habitability issues right away.
Hiring an expert takes a lot of the pressure and liability off of you.
So sure, you can manage. But there’s an asterisk next to that.
Here’s an analogy: can you fly yourself to Hawaii? Sure you can, but you probably shouldn’t. Unless you know how to fly a plane over water, you should leave the flight details to a trained airline pilot and not try to do it yourself.
Running Your Phoenix Rental Property Like a Business
Just like other real estate markets, Phoenix has its own set of habitability laws and codes. If you’re going to manage your own Phoenix rental property, you need to treat it like a business. Part of that is knowing and applying the law. You also need to have policies and procedures in place, and you need to follow those consistently. You also have to be available to your tenants. Know their rights. Know your own rights. Figure out how to run the business effectively and profitably. That’s a lot more complicated than it seems.
Smart investors know that they’re going to be more successful with a professional Phoenix property management company as part of their team. When you’re looking for property managers or any professionals to help you have a positive investment experience, make sure that everyone is aligned with your goals. You’re the investor. You’re the one setting the agenda and explaining what you are hoping to get out of your real estate investments.
Take your time when you’re hiring a property manager. Have a conversation. In fact, you should probably have several conversations before you hire a company. This is the same process you should follow when you’re hiring a Realtor or a contractor. Engage them in a conversation and make sure they understand your goals and your strategy. Make sure they have a plan to get you where you want to go.
One of the main challenges that investors run into is that there’s no pre-communication to establish the rules of the game. You need to do that. Find out how a property manager operates. Get to know their expectations and share your own. It’s a nuanced industry, and you need to set those expectations and develop a great relationship.
Maintenance, for example, will come with different expectations from owners, property managers, and residents. Make sure you know what your property manager will do when it comes to rental property repairs and how their will prioritize the work that needs to be done. Make sure they can explain to your tenants that repairs are different from cosmetic upgrades. There’s a lot to consider. A good property manager will do the research for you and handle the relationship with your tenants.
Property managers in Phoenix do this full time, every day. We spend our time staying up to date on new laws and understanding the industry trends and market demands. We are experts. You probably have your own career and family. Being a landlord is like running a business and if you’re doing it correctly and working to maximize your investment, understanding the industry will take you a lot of time.
Most real estate investors don’t get into business to own just one property. They know that their profits really only grow when there are multiples. If you don’t have resources and plans, you’re going to find that you now have a second or a third job when you add properties to your portfolio and try to manage them on your own. Make sure you’re gaining an investment, and not another job.
If you want to talk more about Phoenix property management, please contact us at Mynd Property Management.
You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn.