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> A loan at 2.875% is almost like having free money, so even if I need to move, I'd prefer to rent out my house than sell it. I've watched a lot of friends go

> A loan at 2.875% is almost like having free money, so even if I need to move, I'd prefer to rent out my house than sell it. I've watched a lot of friends go through this thought process recently. Locally, the thought process grinds to a halt when they see the exorbitant prices that property management firms are charging for new customers these days. Apparently there's a huge spike in the number of people trying to become landlords because they don't want to give up their low mortgage rates, like you. Property management firms are taking advantage of this. I also see a lot of people changing their minds when they do the math on the size of down payment they'd need and the monthly cost of a 7% mortgage on the types of houses they want to move to. There's a reason people talk about starter homes and trading up as opposed to accumulating additional properties every time they move to a nicer house. OTOH, I know a number of well compensated software engineers who were trying to pour their money into real estate investments. All of them are very firmly paused on buying new properties at the moment.

hef19898 4y ago
Why would you pay a property management firm if you rent out a house / appartment long term? For multiple units sure, but that is a different beast.
- xxpor 4y ago
  Because who wants to deal with the day to day nonsense? I've got a full time job and hobbies already.
- deleted 4y ago
  [deleted]
- smodo 4y ago
  Because you want to be insulated from the trouble renters can cause. Heating breaks at 7 in the morning on saturday? Time to call the landlord. They let mold destroy the bathroom? Better have insurance and now hire someone to take care of it etc. All of that goes away for a percentage.
  - scarface74 4y ago
    I thought that if I ever get a duplex and rent one side out and live in the other. I would still get a property manager and never let the tenants know I own the place. For context: former landlord.
- colinmhayes 4y ago
  You moved to a different location but didn't want to sell your house due to favorable mortgage rate?
- PragmaticPulp 4y ago
  Because it's significantly more work than you'd expect to rent out a place and manage it. Some people get lucky with golden tenants who never cause trouble, pay on time, and even fix little things on their own. Others get unlucky and have to deal with a neverending stream of issues, from dealing with payment issues to having to leave work in the middle of the day to handle the issue of the week. The laws around being a landlord are also more complex than you'd expect. In many locations, you can't show up and fix things on a rental by yourself unless you're a licensed contractor. A lot of landlords ignore that and do it anyway, but if anything goes wrong then you have a target on your back as soon as the tenant engages with a lawyer. Hiring a property management company is a way to pay someone else to handle all of that and take a significant legal liability off of your shoulders. I remember early in my career I worked with a guy who thought he was going to manage a couple rentals on the side while doing his SWE job. He ended up getting PIPed because he was missing so many meetings and had to disappear all the time to deal with the latest issues at one of his locations, or even just to try to find new tenants after the constant turnover.
- mmcgaha 4y ago
  Depends on your personality and skill set. When I rented I watched the property management company do a shitty job on all of the work they did. They would treat the renters (not their customer but their customer's customer) with pure contempt. One place would not let me see the lease terms until I paid a non refundable deposit up front (I walked). Another presented a lease renewal with open ended charge backs and used pretty words to tell me how fair they were but refused to modify the lease (I moved). On the other hand I watched my wife tell a male owner that she would not accept a rent increase and he backed down. Overall if you only have one property, have the right skill set and personality I would say you are better off doing it yourself. If you cannot say no to a young woman then you had better let someone else take care of it for you.
  - mjthrowaway1 4y ago
    As a single property owner a management company is going to give you the B team or C team. You simply don’t bring enough to the table to matter.
    - bombcar 4y ago
      This is 300% the case, and they don’t care about you, either. You’re probably better off finding a good tenant and paying the tenant to manage themselves, paradoxically. Rental management for the most perfect possible tenants (parents) is still a moderate annoyance and more expensive than expected. Without appreciation I’d be below zero, and even with it I’d have to do some serious work to figure out how much I’ve “made”.
- karmajunkie 4y ago
  single unit landlord here… i’ve done the management myself, and i currently use a management firm (which charges me a very reasonable percentage each month). i made the shift because i was tired of having to deal with every minor crisis myself, take time away from work to (for example) meet prospective tenants, get a new AC installed, handle the make-ready process, etc. i had a good long stretch with one tenant that was low-maintenance but they moved out suddenly with very little notice (add managing the lease agreement to the list of stuff i don’t like doing as a landlord) and a lot of work i had to do to clean up after them. all things considered, i’m happy to fork over 5% each month to someone else to deal with those headaches.
  - bombcar 4y ago
    Just do be aware that if the problems get too big the property management firm will walk, leaving you with the bag. Insurance can only do so much to protect against that, but the worst case scenarios are thankfully relatively rare.
- ben_w 4y ago
  I pay a property manager, 10% rent plus VAT, plus whatever costs are involved in actually fixing stuff that needs fixing. I do so for a few reasons: first, I have no idea what my obligations are as a landlord and they do; second, they have a list of local tradespeople whereas I live in a different country; and thirdly, the property is an apartment and the common areas and exterior were already being managed by them.
- lazide 4y ago
  Anyone who owns a house for long (the older the house, the more true it is), knows that it requires constant small bits of care here and there to make it ‘work’. A bit of maintenance on the exterior here, some yelling at a new yard guy who is mangling something here, getting a plumber in to fix a blocked drain there, add some untangling who gets to figure out the fence contractor on top, and you’re looking at work. Not full time work, but it goes on the pile. If it doesn’t happen, it goes into a maintenance backlog that will make your head spin later, and possibly your wallet implode. If you live there, it’s usually straightforward enough to fit it in with everything else, but can be exhausting on it’s own. Through something major in (roof leak? AC breakage?), add it being in an area you don’t live in anymore, and gets harder. Then, you can have tenants that aren’t absolutely perfect, and it gets even harder and more tiring. Late payments? Property damage? Neighbor complaints? If you pick good tenants each time and nothing goes wrong, it can be great. It only takes one case of it not for things to get really unpleasant and overwhelming however. Also, add in the Covid eviction moratoriums, which opened a whole additional can of worms for landlords - if something happens like that again, which precedent has now been set - you could spend years paying a mortgage and upkeep on a place with zero income from it. Personally, I never rent out a place unless I know how to do an eviction in the local jurisdiction. I hope I never would have to, but not knowing how is a good recipe to lose your shirt and possibly any future gains you could ever hope to have. I’ve known folks that had renters who seemed perfectly fine (solid full time professional jobs, etc), but left a complete trash house (literally, multiple dumpsters worth - trash to chest high), and disappeared suddenly without paying last months rent. The underlying truth is that it takes work and management expertise + energy to maintain a house in livable condition, let alone want-to-live-in-it-condition, and that has value. Also, not everyone can, or wants to do that.
  - scarface74 4y ago
    > Personally, I never rent out a place unless I know how to do an eviction in the local jurisdiction. I hope I never would have to, but not knowing how is a good recipe to lose your shirt and possibly any future gains you could ever hope to have. I know how to do an eviction in my local market and did one in my former life as a landlord. That is precisely why I will never be a landlord again.
- scarface74 4y ago
  You haven’t had to deal with evictions, slow paying tenants, or tenants who don’t take care of your stuff have you?
charlie0 4y ago
I think a lot of people in this situation are turning to Airbnb. I've seen so many now listings where I can tell, the property is 100% investment and that the owners haave never lived there.

hef19898 4y ago

Why would you pay a property management firm if you rent out a house / appartment long term? For multiple units sure, but that is a different beast.

xxpor 4y ago
Because who wants to deal with the day to day nonsense? I've got a full time job and hobbies already.
deleted 4y ago
[deleted]
smodo 4y ago
Because you want to be insulated from the trouble renters can cause. Heating breaks at 7 in the morning on saturday? Time to call the landlord. They let mold destroy the bathroom? Better have insurance and now hire someone to take care of it etc. All of that goes away for a percentage.
- scarface74 4y ago
  I thought that if I ever get a duplex and rent one side out and live in the other. I would still get a property manager and never let the tenants know I own the place. For context: former landlord.
colinmhayes 4y ago
You moved to a different location but didn't want to sell your house due to favorable mortgage rate?
PragmaticPulp 4y ago
Because it's significantly more work than you'd expect to rent out a place and manage it. Some people get lucky with golden tenants who never cause trouble, pay on time, and even fix little things on their own. Others get unlucky and have to deal with a neverending stream of issues, from dealing with payment issues to having to leave work in the middle of the day to handle the issue of the week. The laws around being a landlord are also more complex than you'd expect. In many locations, you can't show up and fix things on a rental by yourself unless you're a licensed contractor. A lot of landlords ignore that and do it anyway, but if anything goes wrong then you have a target on your back as soon as the tenant engages with a lawyer. Hiring a property management company is a way to pay someone else to handle all of that and take a significant legal liability off of your shoulders. I remember early in my career I worked with a guy who thought he was going to manage a couple rentals on the side while doing his SWE job. He ended up getting PIPed because he was missing so many meetings and had to disappear all the time to deal with the latest issues at one of his locations, or even just to try to find new tenants after the constant turnover.
mmcgaha 4y ago
Depends on your personality and skill set. When I rented I watched the property management company do a shitty job on all of the work they did. They would treat the renters (not their customer but their customer's customer) with pure contempt. One place would not let me see the lease terms until I paid a non refundable deposit up front (I walked). Another presented a lease renewal with open ended charge backs and used pretty words to tell me how fair they were but refused to modify the lease (I moved). On the other hand I watched my wife tell a male owner that she would not accept a rent increase and he backed down. Overall if you only have one property, have the right skill set and personality I would say you are better off doing it yourself. If you cannot say no to a young woman then you had better let someone else take care of it for you.
- mjthrowaway1 4y ago
  As a single property owner a management company is going to give you the B team or C team. You simply don’t bring enough to the table to matter.
  - bombcar 4y ago
    This is 300% the case, and they don’t care about you, either. You’re probably better off finding a good tenant and paying the tenant to manage themselves, paradoxically. Rental management for the most perfect possible tenants (parents) is still a moderate annoyance and more expensive than expected. Without appreciation I’d be below zero, and even with it I’d have to do some serious work to figure out how much I’ve “made”.
karmajunkie 4y ago
single unit landlord here… i’ve done the management myself, and i currently use a management firm (which charges me a very reasonable percentage each month). i made the shift because i was tired of having to deal with every minor crisis myself, take time away from work to (for example) meet prospective tenants, get a new AC installed, handle the make-ready process, etc. i had a good long stretch with one tenant that was low-maintenance but they moved out suddenly with very little notice (add managing the lease agreement to the list of stuff i don’t like doing as a landlord) and a lot of work i had to do to clean up after them. all things considered, i’m happy to fork over 5% each month to someone else to deal with those headaches.
- bombcar 4y ago
  Just do be aware that if the problems get too big the property management firm will walk, leaving you with the bag. Insurance can only do so much to protect against that, but the worst case scenarios are thankfully relatively rare.
ben_w 4y ago
I pay a property manager, 10% rent plus VAT, plus whatever costs are involved in actually fixing stuff that needs fixing. I do so for a few reasons: first, I have no idea what my obligations are as a landlord and they do; second, they have a list of local tradespeople whereas I live in a different country; and thirdly, the property is an apartment and the common areas and exterior were already being managed by them.
lazide 4y ago
Anyone who owns a house for long (the older the house, the more true it is), knows that it requires constant small bits of care here and there to make it ‘work’. A bit of maintenance on the exterior here, some yelling at a new yard guy who is mangling something here, getting a plumber in to fix a blocked drain there, add some untangling who gets to figure out the fence contractor on top, and you’re looking at work. Not full time work, but it goes on the pile. If it doesn’t happen, it goes into a maintenance backlog that will make your head spin later, and possibly your wallet implode. If you live there, it’s usually straightforward enough to fit it in with everything else, but can be exhausting on it’s own. Through something major in (roof leak? AC breakage?), add it being in an area you don’t live in anymore, and gets harder. Then, you can have tenants that aren’t absolutely perfect, and it gets even harder and more tiring. Late payments? Property damage? Neighbor complaints? If you pick good tenants each time and nothing goes wrong, it can be great. It only takes one case of it not for things to get really unpleasant and overwhelming however. Also, add in the Covid eviction moratoriums, which opened a whole additional can of worms for landlords - if something happens like that again, which precedent has now been set - you could spend years paying a mortgage and upkeep on a place with zero income from it. Personally, I never rent out a place unless I know how to do an eviction in the local jurisdiction. I hope I never would have to, but not knowing how is a good recipe to lose your shirt and possibly any future gains you could ever hope to have. I’ve known folks that had renters who seemed perfectly fine (solid full time professional jobs, etc), but left a complete trash house (literally, multiple dumpsters worth - trash to chest high), and disappeared suddenly without paying last months rent. The underlying truth is that it takes work and management expertise + energy to maintain a house in livable condition, let alone want-to-live-in-it-condition, and that has value. Also, not everyone can, or wants to do that.
- scarface74 4y ago
  > Personally, I never rent out a place unless I know how to do an eviction in the local jurisdiction. I hope I never would have to, but not knowing how is a good recipe to lose your shirt and possibly any future gains you could ever hope to have. I know how to do an eviction in my local market and did one in my former life as a landlord. That is precisely why I will never be a landlord again.
scarface74 4y ago
You haven’t had to deal with evictions, slow paying tenants, or tenants who don’t take care of your stuff have you?

charlie0 4y ago

I think a lot of people in this situation are turning to Airbnb. I've seen so many now listings where I can tell, the property is 100% investment and that the owners haave never lived there.