How to avoid the $10 per hour property management jobs
Guilty as charged. Shelly and I are sometimes guilty of doing the $10 per hour property management jobs. What I mean by the $10 per hour jobs are all the jobs that you know you should hire people to do, but you find yourself attracted to, in the name of saving cash, improving cash flow etc.
Here is the story that has lead us to significantly minimize the amount of them we do.
When we first started investing in real estate we were into buying older properties, living in and renovating them, and then selling for a profit. It was rewarding, stressful and tiring. We would work our day jobs all day, then go home at night and work on our house. We went through several years of living in renovation projects. We did everything we could to avoid paying someone else to work for us. We would sacrifice our own mental well being to save a dollar.
This included painting, plumbing, flooring, junk removal, landscaping, etc. I can remember spending every moment we had off work, working on one of our projects. We learned a lot, but basically had no life, except between projects.
We eventually changed our investment strategy to a buy and hold formula. We tried to do the work ourselves, but by this time we had a child, plus demanding jobs. I will admit that I do find something therapeutic about doing manual labor and the picture in this post is Shelly a couple of weeks ago putting a fresh coat of paint on a door, to spruce it up before a showing, but we have minimized the small jobs we do.
It was a conversation that I had with an experienced investor one day that changed my outlook for good. He basically said, focus on what you are good at, let the professionals do what they are good at. He said if I wanted any kind of piece of mind in this business, I would have to stop doing the $10 per hour jobs.
You see at that point I realized I was better off focussing on my day job, finding and funding projects, rather than trying to fit working on the project into my already jammed schedule. He said my focus should not be on just adding to my portfolio with buildings, but adding systems to handle the extra buildings, without increasing my work load.
I found changing my mindset saved time and allowed me to think more clearly, which has lead to more money and piece of mind.
Here is my advice:
When you are building a real estate portfolio, make sure you are building systems at the same time.
Make sure to always have a professional handyman that can handle small jobs on speed dial. This is one of the most valuable members of your team. You may think you are saving money by driving out to a property on a weekend or after work, but believe me, your time is better spent planning your next project, or spending time with family or what ever you do to relax.
If you want to make your life even easier, hire a professional property manager.
Plan your projects right to the smallest detail. If you do not have things like cleaning a job site, hanging blinds, placing and hooking up appliances, delegated, then you will likely find yourself doing those $10 dollar jobs yourself. Even if you have to pay $20 or $30 per hour, you will still be further a head hiring someone to do them.
I know what you are thinking, we are seasoned veterans, and Shelly is doing a $10 per hour job in the picture. I will tell you with the systems we have in place, we do not do too many jobs like that.
I just wanted to make sure you do not beat yourself up, by occasionally doing a small job, or taking care of a small tenant issue.
Michael P Currie