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The stale sales market in Atlanta
Five personal stories of the pain of selling in this market.
by Robert Locke
Oct. 12, 2009

After 30 years of buying, selling, leasing and managing rental houses in Atlanta I am shocked and saddened by the stories that are unfolding before me with some of our investor clients. The current state of the sales market is causing some serious pain ‘for those who must sell their houses in this market’. Here are just a few stories I have personally seen in the past six months.

Story #1
One investor bought a perfect little investment property (through Crown) in Acworth seven years ago for $142,000 (about $10,000 under market). We’ve managed the property as a rental since he bought it. He had to sell the property recently so we ran the comps and listed it for $159,000 after he put granite counter tops in the kitchen, tile floors and several other upgrades. It was beautiful. It was a little ‘over-improved’ but the community supported $160,000 plus. After 30 days he lowered the price to $149,000, then $139,000 then $129,000. Finally, after four months, we got an offer of $129,000, with seller paying closing costs and commissions of $10,000. He took the offer because ‘he had to sell.’ After working out the details of the home inspection the appraisal came back at $120,000 and the deal fell apart. How can this happen you say? Simple. Due to the slow economy, and fear of mortgage lenders, there are very few buyers and lots of sellers. Lenders (and their appraisers) are very cautious and not sure where it is all going to end up. Lenders are making it very hard to finance good buyers and good houses. The way they protect themselves is to ‘lend with very low loan-to-value ratios.’ They do this by manufacturing low appraisals. It’s just where lenders are in today’s market.

Story #2
Another client bought a new home in Alpharetta in 2006 for $220,000, ($30,000 under the ‘then market value’). He had the same tenant for the past three years. When the tenant moved out he put it on the market for $199,000 hoping to get a buyer quickly. Three months later he took an offer at $180,000 and agreed to pay closing costs and commissions. He netted $168,000, had a $200,000 loan balance, and had to bring $32,000 to the closing. After four months of payments, rehab costs and utilities he spent $42,000 to sell it, plus he lost his original down payment of $30,000. Conclusion: If you don’t have to sell …. Don’t!!!!!!!!!!!!

Story #3
Another investor bought a beautiful five bedroom home from Beazer near the Polo Fields community in Cumming, a great place to own real estate. This is a great swim and tennis community with tons of potential for appreciation. This is a prime area of Atlanta that traditionally holds its values, even in a recession. He got a bargain at $270,000 in 2006 during the closeout phase of the community. He borrowed $240,000 and leased it for three years. Then, he was forced to sell it.

We listed this beautiful property for $249,000 instead of the $320,000 we expected. He got an offer for $220,000 and took it. After commissions and closing costs he netted less than $200,000 and had to bring $41,000 to closing. Think about this. He lost his down payment of $60,000, spent $15,000 rehabbing and carrying the property, then spent $41,000 to get it closed. This is not the way ‘investing in houses’ is supposed to work, and not the way it has gone for the past 30 years. Conclusion … keep your tenants there and keep your property for a few years. Sell it when the market is back.

Story #4
Last October a builder client of ours was selling homes in Grayson in the low $300’s. One of our lease purchaser’s fell in love with one of them. Before he put down his $30,000 non-refundable earnest money they had SunTrust appraise the home to be sure they could buy it when the time came to close. The appraisal came back at $270,000. The builder reluctantly agreed to lease purchasing the home for the $270,000 it appraised for. Last month the tenant/buyer completed his final application for the loan. Just before the closing another appraiser went to the property and came back with a value of $220,000. The builder refused to sell for $220,000. The tenant can’t close at the agreed upon price of $270,000 and the builder won’t sell for $220,000. The buyer lost their $30,000 earnest money and the builder is letting the construction lender foreclose on the property, forcing the tenant to move out.

Story #5
Crown has been managing three homes for one of our more sophisticated investor clients. Last January he listed them for sale with a very strong broker in North Atlanta. He priced them well under market and offered to pay closing costs. He paid for extra marketing, utilities and lawn care for eight months. He has had six showings and no offers. He is not trying to re-rent them.

We are in troubling times. It is clearly a buyers market and desperate sellers are paying a big price to ‘dump their properties.’ If there is any way to hold off selling your rental property for three to five years you should do so. Everyone thinks it will get better next year but my guess is it will be three to five years before we are out of this real estate mess.

What should you do?

1. Keep your tenants happy.
   Long term tenants will make you money and keep you out of the resale (and re-rent) market. There are plenty of good tenants in the market but they have lots of vacant homes to choose from and they are bargain shopping. It’s not the time to be looking for a new renter. Keep up the property and don’t give your tenant a reason to move.
2. We see some of our owners doing some radical things to keep their tenants in their properties at renewal time.
   Some are offering ‘no rent increase’ at renewal; others are ‘dropping the rent’ to keep a good tenant; some are painting rooms, cleaning the carpets, adding ceiling fans, installing garage door openers, and replacing carpets to keep good paying tenants for another year. These are all pretty insignificant costs when you compare it to the costs of a vacancy (see our article on “the cost of a vacancy” on our site).
3. Negotiate long term leases.
   Long term tenants are the key to making money in rental property as vacancies are very expensive. Always take a 24 or 36 month lease at a locked in rent. Remember, the issue is ‘long term tenants’ not and extra $50 a month.

The sales market in Atlanta is not as bad as some areas of the country because we have a stable real estate market. However, the current slump in sales won’t be over soon. We are three to five years away from having an acceptable sales market return and you need good tenants to sustain you until then.

The secret … Keep those tenants in your home and paying the rent.

Things You Can’t Turn Over To Your Property Manager
by Robert Locke
Sep. 24, 2009

Some property owners get confused about what their property manager does when they hire them. It’s probably easier to define what we can’t, or shouldn’t do. After managing rentals for 30 years we have developed a short list of things that you should never ask your property manager to do for you.

1. Make your mortgage payments
   No one should make your mortgage payment for you. The consequences of not making them on a timely basis could be catastrophic. Your mortgage could go into default, your credit can be affected and you risk loosing the property in a foreclosure if the payment is not kept current. Never trust another to make your mortgage payments for you especially your busy property manager.
   
   
2. Pay your property taxes
   You don’t want your property manager responsible for paying your property taxes. Owners should have the county mail tax bills directly to them for payment. Failure to pay them can have serious consequences and should not be passed to a property manager. If you get a tax bill and want it to show up on your monthly owners report for tax purposes mail it to them along with a check but don’t expect property managers to receive the tax bill and pay it.
   
   
3. Maintain your landlord insurance and umbrella policy
   If premiums are not paid the consequences could be disastrous. You should stay in direct control of your insurance coverage and premium payment. This is too important to pass off to your property manager.
   
   
4. Track and pay your Home Owner Association dues
   If you don’t pay your dues, you can be fined, accrue attorney fees, and get a lien put on your property. You should have your HOA mail everything directly to you and pay your HOA dues directly to them. Also, HOA’s don’t respond well to third parties like property managers. They want a direct line to the owner regarding violations, assessments, amendments and community problems. You must stay in the loop, receive their communications, and get them to your manager to address. As much as you would like to pass this on to your property manager there is too much at risk.
   
   
5. Contact with your home (builder) warranties
   Warranty companies don’t respond well to third parties like property managers and tenants. They made promises to you, not us, and often we need your help getting them to respond. Also, they are not good at responding to emergencies. Property managers need your muscle with the warranty company when they have a problem.
   
   
6. Turning the utilities on and off
   Utility companies are making it harder and harder for third parties (management companies) to turn utilities on for someone else. Utility companies want the owner of the property to set up the account, pay the deposits and monthly bills when the property is vacant. Also, when property managers have multiple properties active with the same utility, the utility companies consistently misapplies deposits, charges and refunds. We are constantly fighting them (and the owner) over incorrect account records.
   
   The solution: turn them on in your name during the vacancy. It only happens every couple of years so it’s not time consuming.
   Note: Utility companies will not allow third parties to set up "continuous service" preventing utilities from ever shut off. Only the owner can do this. Set up continuous service one time and forget about it forever.

You should not let your property manager manage everything. Some issues just have to stay under the owner’s control for their protection.

Why So Many Property Managers Go Out of Business
by Robert Locke
Aug. 27, 2009

Part of our strategy for growth in the past 10 years was to ‘acquire other management companies.’ With lots of managers going out of business in the Atlanta market we have learned a lot about ‘how not to manage rentals’ from these acquisitions. The things we have learned, and the things we have seen, give us a unique perspective as to ‘why property managers go out of business.’ Our experience should make the prospective landlord smarter as they investigate managers to lease and/or manage their property.

Here are our findings after buying out 12 other property managers:

First, the most common error of these 12 companies was that they got into the business by accident and never intended to develop a property management business. Most realtors list and sell for a living and when they manage they often do it as a sideline to their primary business and don’t do it very well. In a slow sales market lots of them hear their clients ask, “if is doesn’t sell can you rent it?” Most realtors don’t know how to say no so off they go starting a new and very different business. Most agents think "if I can sell a house I certainly can lease one, what is the big deal?" not realizing they are getting into something they have never trained for and don’t know much about.

Most brokerage firms in the Atlanta market know they don’t do management well and refuse to have a rental department. They have learned that it is a wormy business and wisely choose to stay out of it. Many try it for a year or two and then sell out to folks like us who do it for a living. We manage for many brokers in Atlanta who have figured out that property management is very different than listing and selling. They have also learned that sales people don’t make good managers and property management shouldn’t be done by their sales agents.

I got into the business making the same mistake. I sold several hundred houses to investors and caved in when I heard them say “I’ll buy it if you’ll manage it.” It took me several years to figure out what I was doing and my learning curves cost me, and my clients, way too much. Nine out of the 12 companies got out of management because they never really intended to get into it. They just fell into it and discovered that it was harder than it looked.

Secondly, these companies patch-worked their operational systems together. They used Quicken to manage the owner’s money; their current escrow accounts to manage the rent; their sales agents to do the leasing (a very bad idea); their sales manager to oversee their rental department and their local MLS system to do their advertising. They just didn’t understand that the tools they developed to support their brokerage operation were not designed to manage rentals. Professional property managers adopt specific tools that were designed for the rental business and don’t try to adapt the existing systems for the job. Ten out of the 12 companies we acquired were plagued with this error.

Thirdly, they build the wrong model. New managers take on whatever comes their way. They manage the gated community, the condo, the government subsidized housing, the multi tenant home, the high-rise town home, the ragged duplex community, the $600 a month triplex and the $4,000 a month mansion, not realizing that each of these is managed very differently. We down-sized 10 years ago from 750 houses to 350 because we developed a bad model. If the property manager you’re interviewing can’t articulate their ‘management model’ you should keep looking. They may become the next statistic of the "why managers go out of business".
Nine out of the 12 we acquired struggled with this aspect of management.

Fourthly, they give away their services. Or, they discounted their fees to compete. The start-up manager naturally finds it difficult to compete with the seasoned professional so they are forced to compete by lowering their fees. Beware of the discount fee manager’ To properly advertise, staff, answer phones, keep the books, attend court, oversee maintenance, and operate a management business it takes lots of money and smaller operators will find it hard to function on a reduced budget. There are many services the client needs from their manager and lowering fees will choke off their ability to get the job done and stay in business. Property management is a nickel-dime business and every nickel and dime counts. Discounting fees is a short term formula that sinks many new managers.
Eleven of the 12 companies we acquired offered discount fees that greatly added to their inability to stay in business.

Lastly, they failed to adhere to strict property management protocols.
Property managers wear many hats and when they can’t afford good staff to track important management details things start falling through the cracks. The companies we acquired shared this common malady — they let important things go. Things like letting leases go month-to-month instead of renewing them for another year; taking partial rent and loosing the ability to evict over unpaid balances; failing to do a proper move in inspection; approving weak applicants; enforcing a no pet policy, and doing regular property visits. These little things mount up and undermine the productivity of the property. There are a thousand moving parts to the property management business and missing them regularly drives good people out of the business. Twelve out of 12 were inundated with this problem and it was one of the primary things that drove them out of the business.

Conclusion: Property managers have a high mortality rate. I can name 18 in the Atlanta market that have folded, or been bought out in the last 10 years. It’s a nickel-dime business with high labor costs, high liability, and lots of stress. Find a manager who has been in it for a while and make sure they do property management as a business, not as a side-line to something else. Ask lots of questions and choose carefully.

Final Note: there is a large trade organization that supports the property management business where you can find managers that are in the business by choice and not by accident. Go to <http://www.NARPM.org> for more information.

10 questions to ask your property manager before you give them your business

Selecting a good property manager is much like choosing an accountant. You need to know what the issues are, and have a set of questions to ask them, before you give them your business. If you’re new at owing a rental property here are some suggestions on what questions to ask when you’re selecting a property managers.

Do they manage in the geographic area where your property is located? Property management is geographically sensitive. No one manages in all parts of town unless it’s a small town. Most property managers have learned that if the property is located to far away from the office, it will get neglected. We have learned this the hard way and so have other companies. No one company can be all things to all people. Figure out where they manage before you even consider them as your manager. If they don’t manage where your property is located, look for someone else, or better yet, have them refer you to someone else.

Consider using a manager that is doing a volume of business. How many houses do they manage? How many do they lease each month? How many properties do they have on the market for rent today? How long does it take them to lease a house? How many staff are dedicated to managing rentals vs listing and selling?  We are all tempted to use a small company where the owner (and manager) knows you personally and has only 50 properties to oversee. “They have more time to concentrate on my property,” we argue. That sounds good on the surface but there could be some serious drawbacks with this argument. If they don’t have the budget to get your home advertised aggressively, you will probably have longer vacancies and less profit. If they can’t show properties 24/7 it will take longer to get it leased. If they don’t have staff to help them they can’t oversee a maintenance problem, attend court, collect rent, do a move-out inspection, or deal with a bounced rent check all at the same time. They will be spread too thin to cover all the bases and may not do anything really well. The larger company isn’t perfect either but at least they have the manpower to do everything that needs to be done without neglecting something. There are benefits of both models. Make sure you think this through and pick the company size that can get the job done and make you the most profit.

It is hard to beat experience as a teacher. Pick someone who is not learning on your dime. How many years have you been managing rentals? What property management designations do you have? Everyone has to start somewhere. There is nothing negative about being new in the business.  The consideration for a property owner is do I want this manager learning on my dime? Learning curves are expensive. Learning how to evict, handle mold, a tenant bankrupting, taking partial rent, attending court, dealing with roommates, getting a guarantor on a lease, collecting monies owed after the tenant moves out, handling a gun shot incident, dealing with a house fire, or an owner losing a house in a foreclosure are all learnable. The problem is, it will cost you something for your manager to learn how to handle these things while managing your property. You may not want them to learn at your expense. There are experienced managers in every market that have handled all these things and more. You probably don’t have to pay them any more than you do the start-up company.

Technology drives businesses and property management is no exception. What rent payment systems do they offer the renter? E-Check, ACH and Credit Cards? Can they electronically deliver your funds to you? Do they have a secure functioning website? Are they a member of the credit bureau or buying credit reports off the web? Property managers need to be tapping into all the technologies that other businesses use. They need to be receiving rent by ACH, e-check, credit card, and personal checks (that are scanned and shredded). They need to drive their business through the web, emails, text, electronic funds, and offer 24/7 emergency maintenance response systems. They need to use shredders, security cameras and have a secure website to receive applications, credit card charges, and social security numbers. Small shops, and traditional sales brokers, don’t have this stuff and it’s an indication of their seriousness (or lack of seriousness) about the property management business.

What about insurances? Do they have general liability insurance, workman’s comp, errors and omissions? If not you may be paying a high price when they make a mistake. These coverages are common for the professional manager but neglected by the traditional sales broker or small operator.

Good property managers don’t just respond they are proactive about managing their properties. How often do they visit the property, schedule cleaning gutters, doing fall and spring landscaping, termite bond inspections, and fall and spring HVAC service? Some companies wait till it’s broken while others offer services to prevent maintenance breakdowns. Some do a full home inspection once a year while others do a drop-in property visit every quarter. You should know what proactive managing they do and what they charge for those services if anything.

Some companies have in-house maintenance services while others use outside contractors. Do they have a maintenance department or use independent contractors? Do they charge a fee for arranging maintenance? Are you allowed to do your own maintenance? Are you called before any maintenance is done? Do you pay the invoice or is it paid out of your escrow account? Do they maintain an owner reserve for maintenance? There is no right or wrong on this issue; you just need to know. Some property managers come out of the home inspection and repair business while others don’t own a tool belt. Maintenance is a major part of property management and maintaining a good bank of maintenance people is an ongoing hassle. Good managers have lots of go to vendors to handle mold, gas odors, electrical issues, plumbing problems, roofing, appliance issues, siding, painting and the list goes on. All this takes time and good property managers take the time to keep these relationships strong so they can support the maintenance side of the business.  You should expect they have this aspect of the business down pat and don’t expect you to handle it.  

Take the time to be informed before you decide as you are entrusting someone with one of the largest assets you have. You can always adjust later but it will cost you plenty to change managers. So, take your time and ask the right questions.

How to identify a professional property manager
by Robert Locke
May 8, 2009

It’s quite impossible at a glance to identify a professional in any industry let alone an industry like real estate. Whether it’s a doctor, physical therapist or a plumber we all struggle with “how can I tell who’s the real pro?” Their advertising doesn’t help us; their office location doesn’t help; their personality tells me nothing; what do we rely on? Most of us have learned to rely on things like licenses, references, specialized training and designations to figure out who’s the professional. The same methods can be used to identify a professional property manager.

First, they must be licensed by the real estate licensing board where they practice their trade. Each state regulates their real estate business through a licensing process. Citizens of the state can take a series of classes, pass some tests, get a license and post it with a broker in that state. Each broker is responsible for the practices of that agent and oversees their business dealings. State licensing boards issues licenses, give reprimands, censure bad behavior and revoke licenses when appropriate.

Most state licensing boards don’t have a special license for property managers as they do for appraisers. That means any agent can manage rentals, no matter what experience they have in property management. Seasoned brokers have learned that leasing and managing is very different than traditional sales and won’t let agents manage under their license. Conclusion just having a real estate license does not qualify you to be a property manager.

How about specialized training and designations? There are many real estate trade associations that offer specialized training and designations for the traditional brokerage industry. We all look at real estate agents business cards and are astounded at all the initials after their names. Most of the time we are too embarrassed to ask what the designations mean so we just assume they know their stuff. Every nitch of the real estate industry has its designation and the professional property manager is no exception.

There are only two trade associations dedicated to training, equipping, designating, policing and uniting the property management industry. One is The Institute of Real Estate Management (known as IREM). This organization’s focus is on managing apartments and office buildings. They give out the Certified Property Manager (CPM) designation and it is widely recognized in the commercial real estate market.

The other is the National Association of Residential Property Managers (www.narpm.org) a 20- year-old trade association committed to the training of residential property managers for the single-family home industry. If a property manager tells you they are not an active member of NARPM, they are not serious about property management as a profession and are missing out on top-notch training and education. There is no alternative to the training and designations you get from NARPM if you are trying to manage houses, duplexes, quads and condos. Real estate agents who take property management seriously are constantly attending NARPM meetings, workshops and seminars to sharpen their skills on the issues of managing rental properties. If they are not, figure out what their real business is, because it’s not property management. Here are some of the designations awarded by NARPM.

Residential Management Professional (RMP)
This designation takes about three years of hard work and study to earn. It is specific to residential property management and there are around 160 agents in the country with this designation. You can find one in your city on www.narpm.org.

Master Property Manager (MPM)
This designation takes seven to ten years to earn. There are only 35 in the United States. These are people who have studied this industry for a long time. They must have 500‘management years (that’s managing 100 houses for at least five years) of experience as part of the requirements for this coveted designation. They are experienced management professionals and usually trainers in the real estate community.

Certified Residential Management Company (CRMC)
This is a company designation not a personal one. A CRMC is a company that NARPM as a whole has decided is a leader in this industry. This company has gone through a long and rigorous process of qualifying including a company audit done by industry leaders (MPM’s). They audit the company’s employment systems, accounting systems, procedure manuals, insurances, management policies, employee handbooks, hiring practices and much more. They have been presented to the trade association as a candidate and scrutinized by a panel of its peers. At this writing there are only 22 CRMC’s in the United States. It’s a difficult designation to get and coveted by anyone in the business.

The last criteria is experience or time on the job. I’m not talking about time in the real estate business but time doing the hard things of managing properties. Someone who has listed and sold houses for 20 years has less experience to offer than someone who has been managing rentals for 5 years. I hate the idea of paying for some one else’s learning curves and would have more confidence in the experienced manager than the experienced sales broker. The value of experience for property managers is hard to measure but it’s about how many evictions they’ve had; how many house fires; how many skips and abandon properties they have had to manage; how many bounced checks they have dealt with; how many vicious dog bites, police reports, rodent infestations and emergency repairs they have dealt with; and how many mold problems have they solved. It’s hard not to be drawn to the company who has been in the property management trenches for 20 years and has dealt with everything that property management throws at you.

Finding a professional property manager is easier than you think when you know the issues and have the right questions to ask.

There are usually three property management models in any town to choose from.
by Robert Locke
May 01, 2009

First, there is the brokerage firm with a rental department model.
These companies list and sell houses for a living, and have a “rental department” in the basement. Some of them do management well enough but their agents are always torn between showing a home for sale, and showing a home for rent. It doesn’t take a rocket scientist to figure out that agents make a lot more money on a sale than they do renting a house. Most agents refuse to work with renters because it just doesn’t pay enough. Call around and you’ll hear lots of brokerage firms say, “We don’t do property management”. They understand how different sales and leasing are and experience has taught them they don’t mix well. When they do manage rentals, it’s a sideline to their brokerage operation and not their core business. A few are doing it because they have to not because they want to.  Most will admit it is a necessary evil because they want to appear to be a full service company. You will recognize these companies by looking at their website.  Most of them don’t even mention their management department and their company advertising fails to mention they manage rentals. It’s just not worth promoting.

Then there is the mom and pop cottage business model.
In any town there are agents that manage a few houses out of their home. They are generally learning the business and some are even trying to grow it into a real company. We have bought out 12 of these companies over the last 15 years and watched many others close their doors and go out of business. Property management is tougher than it looks. Lots of agents go into it thinking it’s just an extension of their sales business, only to discover that it’s a completely different business than they expected. Many get into property managing when times get tough and get out when sales return. These businesses come and go and often leave the property owner in a stranded.

Lastly, there is the freestanding property management company.
This is the company that does property management as a primary business. Their staff has designations from the property management trade organizations and they pride themselves in the property management training they have received. They see property management as a profession and have studied it as such. They have offices and staff to handle the varied issues of managing, and they are marketing property management as their core business. This company has developed several rent payment options for their tenants, has varied ways to disburse to their owners, are members of the credit bureau, are posting available properties on the big national rental hosting web sites (not just in the local multiple listing service), and attend the local property management trade association meetings. They have professional designations in property management and have taken the time to learn the intricacies of this business. There are plenty of these companies in every town. You just have to know what your’re are looking for.

Shopping for a property manager?
by Robert Locke
April 24, 2009

Because of the current economic climate, property managers are popping up all over the nation. Some just got their license, some have been listing and selling for a living, and most don’t have a clue what they are getting into. If you are considering hiring a property manager you need to understand the issues. What you don’t know can hurt you! Here are some things to think about before you make the decision, “Who can I trust to manage my rental property?”

First, there are thousands of good realtors in this country that make great listing (buyer’s) agents but are currently starving and looking for ways to supplement their incomes. As properties sit on the market longer and longer customers are asking their listing agents, “Can you rent it?” Realtors who are accustomed to saying “no” to that question are starting to say “yes” and enter a world they are neither trained for nor familiar with.  These well-intentioned agents have the license to manage rentals but their skills are not developed in this unique field and it will take them a while to figure things out. Property management is very different than what they are use to and it can cost you plenty to be part of their learning curve.

Next, Property managers must be licensed by the real estate regulatory agency of their state. There are lots of well-intended entrepreneurs running property management businesses out of their homes without a license. This has become a cottage industry, much like the listing and selling business, and it takes almost no capital to get in the management business. They manage properties for others for a fee but are not licensed to do so. This means they are not under the scrutiny and control of the regulatory system created by the states to protect the public from dishonest managers. They typically are not holding other’s money in a trust account registered with the agency and you have no one to report them to when they mismanage the property, the money, or you. If they steal from you there is no place for you to go for help, as there is no regulatory authority with jurisdiction over the unlicensed manager. You are on your own with unlicensed managers so be on your guard.

Lastly, they should manage rentals as a primary business, not as a sideline to another business. Many real estate agents hold themselves out as property manages when their real business is listing and selling. Lots of real estate agents manage a few rentals as a sideline to their brokerage business and these businesses naturally compete for their attention. There are plenty of mom and pop property management businesses in every town and the owner of a rental property needs to consider the shortcomings of these sideline operations. Property management needs the total focus and attention of a manager because it’s demanding and more complicated than it looks. If they are listing and selling homes for a living, and managing a few houses on the side, make sure they have plenty of extra staff doing the managing. The big dollars they get selling houses will distract them from the “nickel dime” business of managing rentals. There is a natural conflict of interest between these businesses and you don’t want them competing for your attention as a landlord. You do not want them having to decide, “do I show a house for sale today, or show a house for rent?” The sale option will always win out because the potential reward is much greater. Find somebody who is focusing on the management business for a living. “I do both” is the wrong answer.

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