In house management vs. a third party manager

What is the most effective AND efficient way to manage property?

Is it more effective to manage property in house or to sub it out to a management company? It is important to look at how we conduct business from time to time. How we did business in the past may not be optimal today, especially in this environment. Advances in technology and industry best practices can offer dramatic benefits to your bottom line. My objective in writing this article is to spark your curiosity to analyze and question how you do business.

Providing great property management is hard to do. Why is something that is not rocket science difficult to do? First there is a large amount of information and detail. Secondly, when was the last time you received great customer service from any business? Great property management is a challenge because it is a combination of these characteristics – it is customer service with attention to lots of detail.

Because of these two factors property management is labor intensive. The more properties you manage the more labor you need. Labor is the number one business expense and it needs to be managed as well. In my frequent conversations with real estate owners and operators I hear a recurring comment: “Our only focus was acquiring property, then credit dried up and we looked around the office and noticed all the people we have on payroll.” If you own and operate properties when was the last time you did a cost benefit analysis for how you spend your time managing properties plus managing staff?

There are several benefits to having in house staff. Read the complete article (PDF).