By Robert L. Cain
I don’t like to answer the telephone. Phone calls usually interrupt something I am in the middle of and I don’t want to be disturbed. Besides, it is usually someone I don’t feel like talking to such as someone trying to sell me something. But I particularly disliked calls from tenants when things broke. With Clint Eastwood’s Dirty Harry in “Magnum Force,” I say “A man’s got to know his limitations.” The telephone is one limitation.
Admit it or not, we all have “limitations,” things we aren’t particularly good at, things someone else can do infinitely better than we can. That’s why we have a management team.
Think of all the hats we might wear managing rental properties.
- Leasing agent
- Tenant screening agent
- Legal advisor
- Property manager
- Maintenance worker
- Tax preparer
How many of those things do you take pride in being great at doing? How many things do you dread doing? How many things that, when you do them, cost you more money than if you had hired someone to do them?
I’m a slow learner and penny-pincher, so with rental property, it took me a long time to discover that I was not only not good at everything, but that I actually cost myself money by thinking I was. Take the telephone, for example. After I hired a property manager, my dread of the telephone diminished geometrically. I no long jumped three feet off my chair when the phone rang. The property manager had to deal with that. Presumably, she didn’t mind the telephone ringing. I didn’t care because it was then her problem, not mine. I only cared if she didn’t deal with the problems I hired her to take care of. And I kept track.
I am not good at plumbing. If I make the mistake of doing plumbing, it’s at least a three trip job. First, it’s a trip to the property to see what’s wrong. Second, it’s a trip to Home Depot to get the part. Third, it’s a trip back to Home Depot to get the part I broke or didn’t know I would need. All that is assuming that I had the tool I needed to do the job. Then, many times I wouldn’t do the job exactly how a professional would have done it, but it was almost right. Then it would break again resulting in another three trips. A licensed plumber would have done it right the first time or would have had to come back free.
I am good at electrical work, though. I have rewired an entire house. Sometimes I actually did simple electrical repairs, but even those I began hiring an electrician to do. Well, actually, it was the property manager who did that. Remember, the phone doesn’t ring about those things anymore.
Then there are the books. I am fortunate to have a wife you enjoys accounting and doing the taxes. Every year we get the new Turbo Tax and she gleefully gets to work. I tell people I am accounting indifferent. She, of course, can’t understand that. She’s the most vital part of the management team.
How about the legal stuff? I am extremely knowledgeable about property law because I have studied it for close to 30 years. I actually have attorneys call me occasionally asking my opinion about rental property matters. (I know, the telephone again.) Even so, I have a law firm I know I can call whenever I feel the need. I don’t know everything and I want to be able to call someone who does or who knows where to look it up quickly. In all my years of rental property ownership, I have never had to evict a tenant. Knock on wood. But if I had, I would have used a service that does just that. I would know that the job would be done correctly and the offending tenant would be out.
I have always made my own decisions about whom I will rent to. Even with the property manager, I told her to get the applications, run the credit and checks, then show me what she had. I demanded the last word on whether to accept a tenant. But she didn’t run a credit report herself; she hired a screening company to do that. The screening company is another vital member of the management team.
However, I am expert at marketing. I would never depend on anyone else to do that for me since I have written numerous articles, done over 50 seminars and trainings on rental property marketing, and am in the process of writing a book about it. Why would I hire someone to do something I am not only most likely better at than most anyone else, but actually enjoy doing? I know how to get a place rented, quickly, inexpensively, and to the best applicant.
That’s my management team. What’s yours? What do you delegate to others because they can do it cheaper and better than you can? Because they can save you money and aggravation? Because they can give you peace of mind?
How much does a lost eviction cost, for example? If you had hired an eviction attorney or service, you win the eviction. That more than pays for the cost of a lost one, doesn’t it?
Have you ever had to hire a contractor to fix something that violated a building code that you had fixed but not properly? How much extra did that cost?
Have you ever been nailed by the IRS because you did your taxes wrong and had to pay interest and penalties? Might a professional tax preparer have avoided that?
You may be more savvy than I am and have figured all that out long ago. Sometimes my intransigence gets in my way, and I avoid delegating. I have a built-in distrust of contractors of any kind, but I learned to screen them all just like I would a contractor I hire to paint a house. They all have to pass muster, to meet my standards, and to be able to show they can do the job the way I want it done. They are my team. Teams are to work together toward one goal—rental properties making an excellent profit. Pick yours so it does.
No, I still don’t like to answer the phone. But at least I know it’s not a tenant calling. My team takes care of that.