Author Topic: Fellow landlords: How much do you outsource?  (Read 6066 times)

isaakthepirate

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Fellow landlords: How much do you outsource?
« on: April 28, 2015, 09:10:15 AM »
Curious from other multi-unit owners how much you outsource?

I'm cleaning up my vacant unit and have a ton of other commitments I'm choosing (like paid work, but also social time, etc.) instead of doing the basic remodeling myself. But I'm hearing my MMM voice in my head encouraging me to do more and not get passive! Primarily, I outsourced $1,000 worth of painting which I have the skills to do, but really didn't want to. Just for context, rent on this unit will likely be $2500/month.

I get the time/money calculation, but if I'm honest I'm also motivated by not wanting to do the gritty work I don't like (like scrubbing the super-filthy tub, also being outsourced at $20/hour).

What do you outsource, and what do you do yourself? Is it a cold dollars calculation? Do you apply the "Here at MMM we never outsource anything?" - (a quote from MMM I can't find the link to, but know I read :) or do you hire folks to do it and consider a business cost?



 

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Re: Fellow landlords: How much do you outsource?
« Reply #1 on: April 28, 2015, 09:40:20 AM »
It's a business cost for me.  Arebelspy and I are both in the "outsource" camp.  For a different approach from a successful long term landlord, check out www.nononsenselandlord.com.  The author is employed in a well-paid professional capacity, but still does most of his own maintenance.

Fishingmn

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Re: Fellow landlords: How much do you outsource?
« Reply #2 on: April 28, 2015, 09:56:08 AM »
Small repairs I do myself - for example, yesterday I replaced a garbage disposal. I also went to look at their broken wash machine but decided it wasn't fixable so went to Lowe's and bought a cheap replacement with their free delivery, installation & haul away so I don't even have to be there.

Last week I did install a new bathroom vanity & faucets in an older condo that was in need of an update.

I almost always hire out painting, carpet cleaning, flooring install, general cleaning, major plumbing and HVAC.

Edit - I should add that I budget 6%/year for maintenance & repairs so I build this into my model. I've never actually hit that high of a number but it's nice to have the buffer in there. That way I plan to be spending money every year to keep them rentable and replace needed mechanicals & appliances.
« Last Edit: April 28, 2015, 10:04:17 AM by Fishingmn »

zephyr911

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Re: Fellow landlords: How much do you outsource?
« Reply #3 on: April 28, 2015, 10:45:12 AM »
Only as much as I have to. If I have time to do it, I do it.

I self-managed for years with my first two rentals. Now at four properties with 9 total leases (multifams, and 3 people sharing one house) and still working full-time for the govt as well as my ANG job, I did actually take my broker's offer of 5% for property management in February - I was struggling to find time to do the job well, and really needed the help. Unfortunately, they weren't making money at that rate and they closed the office last week. So I guess I'll just have to improve my time management and make it work for now. My 3-partner LLC's growth target will definitely involve more properties than I can self-manage, so eventually it will get outsourced, even if we have to pay market rate - hopefully though, we can shop for a deal through my real estate contacts based on portfolio size.

As far as maintenance, I do most work myself. I contract for some plumbing, all HVAC, and electrical work involving the main panel*.

*ironically, although I have an EE degree, I find that my brain is marginal for electrical work and I have had a few close calls where lacking presence of mind put me at risk... so I limit myself to fixtures (lights/fans), switches and outlets

BadStache

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Re: Fellow landlords: How much do you outsource?
« Reply #4 on: April 28, 2015, 10:55:19 AM »
All of it.  Hopefully I'll get time to DIY once FIRE but for now, too much on my plate.  I let my managment company take care of everything, it's better for me to focus on my career at the moment.

Poorman

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Re: Fellow landlords: How much do you outsource?
« Reply #5 on: April 28, 2015, 11:14:35 AM »
I self-manage the local rentals and outsource the others that are about 2.5 hours away.  Honestly, I have so much on my plate right now between working, raising three kids, and managing my dad's affairs due to his dementia that I wouldn't want to take on anymore management responsibilities, even if I was expanding locally.  Right now, my focus is on acquiring properties in the market 2.5 hours away, so it's a no brainer to hand them over to property management. 

Ironically, my last purchase was from an investor with a career/family who was trying to self-manage from 2 hours away and couldn't handle the strain, so I gladly took it over from him and promptly handed it off to my property manager.  I'm not sure why he was so opposed to hiring it out because there was plenty of margin to cover the management expense.  Sometimes, do-it-yourself really is more costly in the long run.
« Last Edit: April 28, 2015, 11:16:07 AM by Poorman »

zephyr911

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Re: Fellow landlords: How much do you outsource?
« Reply #6 on: April 28, 2015, 11:36:18 AM »
I self-manage the local rentals and outsource the others that are about 2.5 hours away.  Honestly, I have so much on my plate right now between working, raising three kids, and managing my dad's affairs due to his dementia that I wouldn't want to take on anymore management responsibilities, even if I was expanding locally.  Right now, my focus is on acquiring properties in the market 2.5 hours away, so it's a no brainer to hand them over to property management. 

Ironically, my last purchase was from an investor with a career/family who was trying to self-manage from 2 hours away and couldn't handle the strain, so I gladly took it over from him and promptly handed it off to my property manager.  I'm not sure why he was so opposed to hiring it out because there was plenty of margin to cover the management expense.  Sometimes, do-it-yourself really is more costly in the long run.

Yep. Any time you don't have the time or physical proximity to do a good job, it's worth paying.

arebelspy

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Re: Fellow landlords: How much do you outsource?
« Reply #7 on: April 28, 2015, 01:14:03 PM »
I have no desire to paint a wall, despite the capability.  I absolutely outsource the work on my rentals.

If I were in need of more money, or enjoyed it, I'd very much be willing to do so.  As it is, I don't need the money, and I don't enjoy it, so I don't do it.  :)

It's a business/investment, so I treat it as such (and hire it out--though you could certainly "hire" yourself to do it).
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zephyr911

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Re: Fellow landlords: How much do you outsource?
« Reply #8 on: April 28, 2015, 01:23:45 PM »
I have no desire to paint a wall, despite the capability.  I absolutely outsource the work on my rentals.

If I were in need of more money, or enjoyed it, I'd very much be willing to do so.  As it is, I don't need the money, and I don't enjoy it, so I don't do it.  :)

It's a business/investment, so I treat it as such (and hire it out--though you could certainly "hire" yourself to do it).
I kinda dislike painting too. I do my best to line up friends/partners for that.
It's kinda crazy what pro painters cost, considering that anyone can do it... it's just slow and tedious to do it right. (I hate tedious)

zoltani

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Re: Fellow landlords: How much do you outsource?
« Reply #9 on: April 28, 2015, 01:41:43 PM »
My units are out-of-state, so I outsource everything. Works for me so far. Last year we did a major remodel on one SFH and I was unemployed at the time so I flew out an did some some of the work, but the majority was outsourced.

trobertson79

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Re: Fellow landlords: How much do you outsource?
« Reply #10 on: April 28, 2015, 02:47:12 PM »
I think of my units like stocks except I have to make two good decisions:  Good buy and good management company.  Then I sit back and let it perform as it will.  In other words, I outsource everything beyond the buying and selecting a management company.

AM43

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Re: Fellow landlords: How much do you outsource?
« Reply #11 on: April 30, 2015, 07:58:53 AM »
I dont outsource anything and pretty much take care of everything on my own.
Painting, plumbing, carpentry, dirty jobs, you name it I do it.
I dont believe in paying somebody to do something I can do.
I work full time and do all work and renovations after work and weekends.
Also have rentals out of state and take care of those on my weekends.
Yes, it takes away from time spend with family but its worth it since I save thousands on typical renovation.

totoro

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Re: Fellow landlords: How much do you outsource?
« Reply #12 on: April 30, 2015, 08:06:50 AM »
I outsource all repairs and basis maintenance, including painting.  I take care of all other management tasks such as showings, rental agreements, and sometimes cleaning.

AM43

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Re: Fellow landlords: How much do you outsource?
« Reply #13 on: April 30, 2015, 08:16:06 AM »
I take care of all other management tasks such as showings, rental agreements, and sometimes cleaning.


My other half takes care of this part. So we are pretty much cover everything to succeed in this business without outsourcing.

FatCat

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Re: Fellow landlords: How much do you outsource?
« Reply #14 on: May 01, 2015, 02:24:43 PM »
Question to those who outsource: How do you find someone you can trust to be reliable? I don't have good luck with that.

chubbybunny

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Re: Fellow landlords: How much do you outsource?
« Reply #15 on: May 01, 2015, 03:42:09 PM »
I have gone both ways, and after the last major clean out (long-term, smoking tenant), I have come to the conclusion that outsourcing is worth it for major work that will take more than a few hours.  What really put me over was that it took 3 days to clean out this person's stuff.  I could have paid one of those hauling companies $255 to do it for me, but I tried saving the money by hauling trash myself.  After that it was paint, tile, minor plumbing and lighting fixtures.

It ended up taking a few weeks to get the house ready again, because I was doing this in the evening after work.  From what I saved in doing everything myself, I ended up losing to lost rent.  If I ever have to do it again, I might act as general contractor and just get everything done in a matter of days instead of wasting my own time. 

However, if you're only considering doing it yourself vs. hiring someone so you can spend that time sitting around while you browse the internet, then you really are throwing money away in hiring out. My DH has repaired plumbing on a moment's notice, saved us hundreds of dollars.  Wouldn't question that at all...

It's also different because we weren't making much money when we first started, but now that one of our properties is mortgage-free, our income is positive even if a big repair comes up.

math-ya

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Re: Fellow landlords: How much do you outsource?
« Reply #16 on: May 01, 2015, 04:36:54 PM »
Question to those who outsource: How do you find someone you can trust to be reliable? I don't have good luck with that.

word of mouth works best- i always try to find good contractors thru other landlords that i know.  angies list can also be helpful. sometimes one of the reasons i dont outsource work is because finding someone that can do it correctly, for a decent decent price is harder than doing the work myself.
having good contractors are worth their weight in gold

NoNonsenseLandlord

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Re: Fellow landlords: How much do you outsource?
« Reply #17 on: May 01, 2015, 04:58:06 PM »
Quote
It's a business cost for me.  Arebelspy and I are both in the "outsource" camp.  For a different approach from a successful long term landlord, check out www.nononsenselandlord.com.  The author is employed in a well-paid professional capacity, but still does most of his own maintenance.

Thanks for the mention.

I do all my own work, my rentals are close. I can see if you live far away, or have too much money that you cannot spend it all, to hire it all out.

I just did a turn today.  I paint, remodel (remove walls, install washer/dryers, etc.), paint, Sheetrock, plumbing, etc.

That is what your vacation time at your real job is for.  Saving money at your rentals.  Here is a post I wrote about some people that want the money from RE, but are too lazy to do it.

http://www.nononsenselandlord.com/2015/03/are-you-too-lazy-to-be-a-real-estate-investor/

arebelspy

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Re: Fellow landlords: How much do you outsource?
« Reply #18 on: May 02, 2015, 08:18:45 AM »
I paint, remodel (remove walls, install washer/dryers, etc.), paint, Sheetrock, plumbing, etc.

That is what your vacation time at your real job is for.  Saving money at your rentals. 



That's why I have investments--so I don't have to do work like that.

To each his own.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Secretly Saving

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Re: Fellow landlords: How much do you outsource?
« Reply #19 on: May 02, 2015, 08:30:23 AM »
We outsource a few items like whole house exterior painting.  All the little jobs we do ourselves.  If we moved out of the area, I'd outsource more. 

Blindsquirrel

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Re: Fellow landlords: How much do you outsource?
« Reply #20 on: May 02, 2015, 03:07:01 PM »
   I outsource almost everything. Have a reliable fellow who does nearly all work for me. I would rather loaf, chill, etc. I still have a full time job. When I started out I did nearly all of the work myself, got burned out, chilled for awhile and when the RE market crashed, I went back at it with a vengeance.

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Re: Fellow landlords: How much do you outsource?
« Reply #21 on: May 04, 2015, 09:01:59 PM »
DH does just about all the work. We have three properties that comprise seven residential units and one commercial that just became vacant in Jan. He is the best paid lawnmower I know. He can outsource and has on rare occasion. He even outsourced and they failed so he fired them and finished the work at a fraction of the price. The nice thing is he can choose. I think he really likes carting that old lawnmower around, it allows him easy access to the properties to keep an eye on them and it is easy work. He does not have a day job and never had to juggle both. He does not handle tenants, we use a PM for that. For hating painting at home, he sure does suck it up come painting time at the properties.

I do his books because I like to and its easy. I use my own spreadsheets I created for my businesses. The formulas roll everything up nicely so its not too much trouble.  I prefer month after month of rents coming in, and just mortgage/sewer/water going out:)

NoNonsenseLandlord

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Re: Fellow landlords: How much do you outsource?
« Reply #22 on: May 05, 2015, 07:08:46 AM »
That's why I have investments--so I don't have to do work like that.
That's why I have investments--so I don't have to do work like that.

To each his own.  :)

All true.  If you do it yourself, you can exponentially increase your cash flow.  Sort of like changing your own oil, or riding a bike instead of a car.  It's mustacian!