Home > Real Estate > How to Buy a Little Freedom

How to Buy a Little Freedom

by Andrew C. MacDonald on June 27, 2011

HandcuffIf you ask people why they invest in real estate, one of the top answers you’ll get is freedom. Contrary to this driving force of wanting more freedom, many investors self-manage and end up instead limiting their own freedom.

In my article Building Your Real Estate Investment Team – Part 7: Selecting a Property Manager, I discussed some of the items a property manager would normally be responsible for. If you self-manage you may find yourself spending a lot of time with tasks such as:

  • Advertising
  • Showing the property
  • Interviewing tenants
  • Tenant screening (including credit and background checks)
  • Filling out leases
  • Collecting rent
  • Handling evictions and other tenant issues
  • Managing trades for repairs and maintenance
  • Coordinating lawn care and snow removal
  • Regular property visits

As a landlord, how many of these items take away your free time and limit your freedom? If you self-manage, the answer is probably most or all of these.

Continue readingReal Estate Investors: How to Buy a Little Freedom on my blog at BiggerPockets to learn why you should put a price on your freedom and how you can buy a little freedom if that is your goal.

Creative Commons License photo credit: jordandelion

If you enjoyed this post, get free updates by email or RSS.

{ 2 comments… read them below or add one }

Nawar Naji June 27, 2011 at 3:08 pm

Interesting article. When do you think it makes sense to get a property manager? It’s good to manage the first few properties to learn what it takes. I view paying 10% property management fee is equivalent to someone paying MERs on their mutual funds which significantly reduce profitability. Having said that, once an investor has 15+ doors, it makes sense to outsource managing the properties.

Andrew C. MacDonald July 5, 2011 at 2:19 pm

Hi Nawar, I started with a property manager from day 1 since I invest in an area which is about an hour’s drive from where I live. I am fairly hands on in the decision making process but rarely interact with tenants in person.

The property management fee does reduce profitability, but you have to place a value on the time you’d spend to do it yourself and look at WHY you’re investing in real estate. For me I am investing to create more freedom for myself, my family and my partners. Having to manage the property myself would be contrary to my goals.

There is the pure math of the investment, but then there is practical math where you place a value your own peace of mind.

Leave a Comment

Previous post:

Next post: