As an investor in real estate, you may have already acquired a handful of properties and are looking to accumulate even more, appreciating this wealth that you’ve been building for a successful financial future. You may be wondering about the positives and negatives of self-managing rental property.

Thus far, you’ve managed the properties in your fledgling portfolio on your own, but you may be wondering, with more investments to come, whether it’s time to hire a property manager—someone who can oversee your income housing and deal with any maintenance or other issues that may arise from your tenants. This would allow you to stop self-managing rental property.

Property managers may be the answer in some instances.

However, continuing to self-manage your own growing portfolio with the experience you already have under your belt is strongly suggested by real estate investments expert Jason Hartman, the founder of the Platinum Properties Investors Network.

A recent episode of his popular “Creating Wealth” show was designed just for income-property investors who, like you, are interested in expanding the properties in their portfolios into double-digit numbers and managing those properties on your own.

During the podcast, you’ll meet Hartman’s mother, Joyce, a longtime real estate investor in her own right, who self-manages an undisclosed number of properties and has found many benefits by becoming a member of an apartment owners association. You’ll also meet Fernando Aires, a retired Apple software expert and Platinum Properties investment counselor who has found self-management of his real estate portfolio much more to his liking than hiring property managers.

Hartman’s Mom, an ‘Extreme Do-It-Yourselfer’ and Owners Association Aficionado

“You’ve heard of extreme sports?” Hartman asks listeners on his podcast. “Well, my mom is an extreme do-it-yourselfer,” he adds about his mother, Joyce.

“Mom, you just blow me away at your level of energy, and you think you’d be kind of scaling back and so forth, but you are not even close to doing that. You are just always running around and the level of extreme is that you now live in Gulf Shores, Alabama, moving there from Los Angeles several years ago. You go back to California to manage the California properties you still have.”

Jason Hartman, too, self-manages some of his own long-distance properties but doesn’t travel anywhere, he says. Rather, he gets an agent in each of those places to conduct walk-throughs and draft new leases for incoming tenants and inspect the properties before the prior tenants leave them.

How can you be as involved in self-managing rental property like Hartman’s mother, who does all of that on her own? For her, much help has come through joining an Apartment Owners Association in Orange County, California. And, she has discovered through the National Apartment Association (NAA) website that there are similar chapters in other states across the country, including Mississippi and Alabama, where she also owns income property.

Joyce, like her son, focuses mainly on single-family homes in her income-property investments, but she notes that the National Apartment Association aids people who own any kind of real estate, joking that “they should change the name to Owners Who Have Rental Units.”

Her son, meanwhile, suggests another title for the group: The Real Estate Investors Association. “It doesn’t need to be apartments,” he says. “Anybody can join it, it’s not a big deal … it’s just a place where you can get some good resources and the vendors go there because they can get a lot of business.”

self-managing rental property

Joyce enjoys the association’s monthly magazine, plus a number of classes the group offers and the vendors directory her son references: “All the plumbers together, all the evictions services together … you know, everything from soup to nuts. All the people that sell stoves, refrigerators, etc. It’s a great organization.”

Like the Platinum Properties Investors Network, Jason Hartman says, the NAA aggregates its services, and its vendors “are kind of used to dealing with shrewd property owners who are expecting good deals.”

“Absolutely,” Joyce says. “For example, the man that I finally chose to fix my floors, he wrote ‘HOA’ on the top of the sheet, because he knew he had to give me a good price.” She recently got one of her entire houses painted at a bargain price, because of the NAA vendors directory.

“Previously for that particular house, I had been paying $1,200, $1,300 and $1,400 and sometimes it looked like a lot of touch-up, too. It wasn’t a complete paint job.”

“This was a complete paint job for a two-story house, three bedrooms, two-and-a-half bath, inside the laundry room … $785. I did not have to tell the man ‘you missed this, you missed that, you missed something else.’ I didn’t have to tell him to clean up his mess.”

The NAA serves more than 160 affiliates and more than 73,000 members who operate 9 million rental units. Its local affiliates are mostly in bigger cities, including one in Birmingham, Alabama, which happens to be a Platinum Properties market. Other Platinum cities offer local affiliates, too.

Joyce does all of her tenant screening through the NAA, via the credit reporting agencies Experian, Equifax and TransUnion and gets any late-payment or eviction notices she needs through an attorney network. Both services come at reasonable prices, as a result of the national organization.

Joyce’s cost to join the owners/apartment association a few years ago was $79 a year. “You know, maybe in a city where you own a couple, three, four, or 10 or 20 properties, it would definitely be worth it to join the association,” son Jason says.

He again stresses that you need not be an apartment landlord to join the group. “When I first joined the Orange County Apartment Owners Association, I was 20 years old and I had my little condo in Huntington Beach. It was just a crappy little one-bedroom condo, and I joined.”

Though today he owns a number of mostly single-family homes as part of a much broader, income-property portfolio, Jason Hartman does own a couple of apartment complexes, too. He explains in the podcast why he likes single-family homes better than the apartments.

Apartments, he says, can be “both good and bad.”

“The quality of tenants is just lower, and it’s much more high maintenance,” he says. “In the apartment, they expect every little thing, and in an apartment, you’re running a business. You will be reviewed on Yelp just like the dry cleaner or the restaurant down the street. It’s a whole different game when you have an apartment complex.

“ … So, the single-family homes, I like them the best, but the advantage of the apartment is you can have this centralized management, you can have these centralized repairs, you can have economy of scale.”

Fernando Aires Ditches Property Managers and Relishes His Self-Control

Fernando Aires, the retired Apple software engineer and Platinum Properties investment counselor who was part of the podcast, explains why he prefers self-managing rental property rather than relying on property managers. He owns about 50 properties with 70 total units, which include some duplexes and quad-plexes. He has hired property managers in the past, but now manages his properties mostly on his own.

Why does Aires think you, as a rental-property investor, might be better off self-managing your own properties, too?

“It’s based on what I’m actually seeing,” he says in the podcast.

“My personality is the type that wants to look at every owner statement that comes for my property,” Aires says.

“I want to make sure I’m not being overcharged for items. A lot of times simple items that a handyman could fix are sent over (by property managers) to full-fledged professionals, plumbers, electricians, for things that really don’t make sense, and I spent a lot of time overseeing and arguing at times with the property manager about why was this done and why was that done.”

He has found, instead, that “it makes sense for me to find a system to do this myself.” A few years ago, he created spreadsheets that help him self-manage his properties, and he devised an overall plan that would lead to his “financial independence day.”

“I’ve been able to do this self-management on several of my properties, and therefore, I can control the costs,” Aires says. “I’m the one who is directly impacted by the maintenance and repair costs that add up fairly quickly, but I think the main thing … is the fact that the tenants seem to have a different dynamic when they’re dealing directly with the owner.”

Jason Hartman says he has found that different sort of dynamic, too.

“The first thing I want to say with this, folks, is that property managers—some of them are awesome,” he says. But, “I’d say some of them are definitely not awesome, and some are pretty bad too. So, it expands the gamut.”

Platinum Properties does deal with property managers as part of its network and has found that sort of mix.

“One of the things we do—if we get a bad apple through our network—is we weed them out pretty quick, because we are constantly assimilating this feedback we get from our clients and eventually we get a few complaints,” Hartman says.

“Even if you have a property manager who dings you, nickels and dimes you, and even if they overcharge you, think of how much better this still is than any type of Wall Street-oriented investment or any type of fund, where there are all sorts of overcharges that you never know about. You have no concept that they’re going on.”

Applying Self-Management to Jason Hartman’s ‘10 Commandments’

As a follower of Jason Hartman and a listener of his “Creating Wealth” podcasts, you already know or at least have heard of his 10 Commandments of Successful Investing. By learning about owners associations as Jason’s mother did, and leaping more and more into self-management, as Fernando Aires did, you’re practicing the first and third commandments of those tenets, respectively.

The first commandment from Hartman’s stone tablets reads: “Thou shalt become educated: Knowledge is a powerful tool. Do your due diligence and become your own best adviser.”

Says the third: “Thou shalt maintain control: Never leave your financial future in the hands of incompetent, unethical, or greedy brokerage houses, fund managers or corporations. Always be a direct investor.”

Asked what she likes best, perhaps, from her owners-association experience, Joyce says:

“The only thing I can say is that—and Jason, you do this in your seminars all the time—it’s the education, and what I see in belonging to the Apartment Owners Association is the constant education.”

Aires agrees that education is the key to successful investing and that the “Creating Wealth” podcasts and other resources that you can find on Hartman’s website offer an excellent start.

“I think it’s the first step in achieving financial independence,” Aires says.

“It definitely was my first step … just trying to learn, listen to podcasts and books, and any information that you can about the different facets of real estate income and real estate investing.”

“There’s so much to learn, and there are always new things. So, without that backing, without background information gathering and learning, it’s really difficult to achieve anything. There’s a big value in that.”

Says Jason Hartman:

“Education is the shortest distance between poverty and wealth. So, that’s definitely important, but the great thing about today is you don’t need to pay for that education, because it’s pretty much free. I guess what I’ll leave you with is go back and listen to the old episodes.”

“Creating Wealth” now has accumulated a library of nearly 900 episodes, some of which are replayed on what’s called “Flashback Friday,” which is when the podcast with Hartman’s mother and Fernando Aires recently aired. In addition to being offered on Hartman’s website, the “Creating Wealth” library also is available in the iTunes store.

“So, go back and just listen to them yourself and really take advantage of them,” Hartman says. “There are some great contents and some great guest interviews that I’ve done.”

“We’re going to keep them coming. We’ve got a lot of great stuff coming up for you as well.”

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