REAL TALK RENTALS

Episode 31: Lessons Learned Doing Property Management

What does it take to be a property manager? What are some key takeaways and lessons learned from experts in the industry? Join Ben and Eric on this episode of Real Talk Rentals as they discuss their own experiences in property management. They share their years of experience working with landlords, home owners, and tenants. Tune in as they discuss the lessons learned from their time in the property management world. This episode is packed with valuable advice you don’t want to miss!

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Lessons Learned Doing Property Management

Ben Bailey: Coming up on today’s episode of Real Talk Rentals. Do you want to know the lessons you can learn from property management? We’re going to tell you. Welcome back to Real Talk Rentals, a podcast brought to you by Oncue Property Management. We’re here to give you all the tips, secrets and behind the scenes looks at owning an investment property. I’m Ben, I’m your host, and with me, as always, is my co-host, Mr. Eric Dixon, the go to expert on all things rental property and real estate. I say that every episode. I might have to change it up at some point, but I’m not that.

Eric Dixon: Cool, man. Yeah, no, I appreciate it, I like it. You’re the go to.

Ben Bailey: Um, so this episode we are going to we had a lot of fun putting this together when we were writing out the script, but we’re going to talk about lessons we’ve learned from property management, all sides of it, whether it’s owning a property, renting a property, or working here. Um, so, Eric, I’m going to kick this off to you first question. You’ve kind of done everything, but let’s go back in time. You’re just an owner. You’re not working in property management. But what did you learn? Signing up with a property management versus self-managing like. Yeah.

Eric Dixon: And I mean the it has been kind of a journey, you know. So stepping back, like you said, you go back to like 2007, 2008 when I got my real estate license and I was just doing sales and for, for a few years. And I remember specifically like my, my clients, I’d sell them a rental and then they would and this is during the bottom of the bottom. You know, we’re selling houses for $50,000, $100,000, a 2 or $300,000 house was a Taj Mahal. Man. It was crazy. Yeah, you could get. But as far as a rental and I would drop off the keys at a property manager and just walk away, I’m like, hey, by the way, I just sold this dude a house band. Here you go. Boom. Yeah, I would just leave. Um, and then just what it has become over time is crazy. So I was just doing sales for 2 or 3 years, and then, um, in 2011, my now business partner and the founder of Oncue, you know, he kind of recruited me and said, hey, I know you’re just a sales guy, but just come on over. Kind of learn the ropes of property management. You could sign up our clients with our service and then you can still do real estate. And I was like, this is the best of both worlds, man.

Eric Dixon: Like, I can I can still do the sales that I’m passionate about. And the real estate industry, buyers, sellers, negotiating that sort of stuff. But then I can I can kind of lean into the property management for some supplemental income. Honestly, at first I saw it as a side hustle that’s like, oh, I can hang my license there, kind of make 500 bucks, a thousand bucks, whatever extra a month. And then I can, you know, be on my way. And then over time, I started, I bought a house and then we moved and that turned into a rental. Then I bought a four plex, and I’m kind of in property management selling homes. And I quickly realized a lot of things that, that I wanted to do with real estate. I wanted to invest in rentals, and I didn’t. Eventually, I didn’t want to manage them, but I, I kept it real close to the chest because I didn’t even quite trust the process, you know, to begin with, with on Q or property management in general. So, so, um. The things I’ve learned. I guess kind of going back to your original question kind of set that that base there is that it’s you have to trust the process and realize it’s an investment and it’s long term. So it’s like, this is not get rich quick.

Eric Dixon: This is not look it, look it on Instagram and stuff. People flipping houses and making 100 grand a house. And you’re going to you’re going to retire in five years. It’s like reality is for most people that it’s this low growing, low, slow growing investment that you nurture and you hopefully give to a property manager. And that’s kind of what, what what I learned, it took me way too long, like it took me 4 or 5 years before I completely assigned it to a property manager here at our office and said, manage my property right. It cost me so much time and money. And I guess that’s my biggest takeaway, is like, I spent the money on the property to buy it, but I was spending so much time managing it by myself that it’s like, this is not worth it. Like, I could just pay. And and I was here, I was in the office with everybody and it still wasn’t worth it. Yeah, I thought, and then I was then I’ve quickly realized you fast forward another five years and I’m like, I wouldn’t go back to self managing ever. Like, yeah, you know, you do need there’s so many, you know, tangible benefits you know, to having a property manager do it. Yeah.

Ben Bailey: Um I like how you said the long term play right. That it’s not a get quick, get rich quick kind of thing. And I think that plays into. So many people they want to self-manage because they’re like, well, I’m only going to manage for a year, and then I’m rolling in the dough, you know, and it’s like, do you want to be, you know, dealing with maintenance calls for the next 15 years, you know, or whatever? No.

Eric Dixon: And the reality is, like, hopefully you’re in a if you have a debt service on the house, maybe you make a few hundred bucks a month. Yeah. But I can tell you that $300 a month extra you’re making, you’re going to put that back into the house. The AC is going to go out. The water heater is going to need to replace. You’re going to need an appliance. You’re going to need to recarpet the rooms. When the tenant moves out, you’re going to have to touch up paint. You’re going to have to do these things. That fluff that you’re making per month is not, you know, gravy that you just spend. Yeah. Because then something comes up. So it’s not your you’re literally not getting rich quick. But what is happening is the tenant’s paying off your mortgage. You have great tax benefits that even I learned over time. You know, five years later I’m like, oh man, that really helped up my taxes five years in a row. Yeah. Depreciation and different things. So um, a lot of that, you know, I just learned over time how things worked. And two, three, five years down the road, it’s like, oh, that’s how move ins work. Oh, that’s how when they move out, it does cost money. Like the tenant just doesn’t move out and a new tenant moves in and everything’s hunky dory. It’s like, no, you have to get the house ready. Some of the stuff you can charge to the tenant, but most of the stuff is out of pocket. Get the house ready. I’ve got to pay the leasing, the leasing fees or whatever. My, you know, the costs are to land a new tenant, right? And there might be a few weeks of vacancy, you know, so there’s like it hurts. But after you’ve done it over and over and over, you kind of learn to know what’s coming up. So. Yeah.

Ben Bailey: All right. So then let’s jump to that point. You mentioned you’re now working in property management. Right. So on that side of it is a guy who’s, you know, selling the services and things like that. What do you think you learned throughout that period of time about property management in general? Yeah.

Eric Dixon: So I think the biggest thing I learned is that property management is not just, you know, collecting rent, because I think that’s everyone’s perception is that property managers just bog down the process. They’re just a middleman, and they just collect the rent and charge a fee or something. You know, and I’m sure that there are cases that that is reality. And that’s why that’s the stigma, right? Sure. But really, a good property management company should not just be collecting the rent, charging a fee for it and making it harder than it is. It should be a very positive, you know, experience. So what I’ve learned is that it’s it’s an essential service for landlords, like whether they know it now or not, that picture perfect landlord situation and resident situation is not the case most of the time. Like, yeah, I would love to rent a house and I’m like, you know what I want to rent from a self manager, husband, wife, owner, come up, make me cookies, give me the keys. I walk into this beautiful house. It’s like if you have that, you are the exception and you just need to run with that as long as possible. Yeah, because that’s not reality.

Ben Bailey: Drop off the keys and say, well, just let me know when you guys are ready to move out. Yeah. It’s like, I’m sure nothing will go wrong ever.

Eric Dixon: And then you get your deposit check when you hand in keys. You know, it’s just that’s not how it works, you know. And so I’ve just learned that property management is a service business, just like a pest control company or a pool service or a, you know, these different type of services that owners, they pay for it and they, they deserve and are expecting good communication and, you know, high end service. And so I did not know that when I was selling real estate, real estate agents, they kind of stick out your chest and you go, I am above property manager. Yeah. You know, property managers are below me and they, they it’s kind of an ongoing joke and it’s not funny, but I can say it because I’ve been a sales person and now in property management is, you know, it’s like they’re the. They’re the real estate agents that couldn’t make it. And that could not be farther from the truth, right? It’s like, no, it’s just sales is literally it’s commission only sales. Yeah. Heavy sales skills. You know, you have to be able to grind and be okay with zero one month and $20,000, one month and zero or whatever it is, whereas property management, it’s a career path, you know, and it’s like you can make great money, you can offer great service, and you can be part of a community and an employer and a team. That’s not what’s selling real estate. It’s all about. So they’re just so apples and oranges. And I think there used to be this more a worse stigma. And now it’s actually we’re attracting a ton of real estate agents that want to be property managers because they realize I can make just as much money and I can be part of a team and an atmosphere, and I can have an office and benefits and all this stuff. Yeah. So did I thought it was totally different than that.

Ben Bailey: So I, I heard one of our sales guys say once that a real estate agent is like. The guy who sells you your brand new car, right? Like it’s the car sales guy. Yeah, but after that, then what you need is a mechanic, and you need someone to change the oil to manage it.

Eric Dixon: Yeah. Maintain it.

Ben Bailey: And even the best car things are going to happen. You’re going to have to have checkups and do these things. And he’s like, you wouldn’t call your sales guy and say, hey, I got to change the oil. Can you come over and do this? You know, it is a whole different skill set.

Eric Dixon: It’s a whole different ball game. And it’s like and both of them are essential, right? Somebody’s got to help you buy the car or buy the house or sell the house or whatever. And we offer those services as well. Like and some people seem as competing services, they are complementary. I think it’s just over the years at least, the brokerage I started at, you just referred it out and you didn’t think twice about property management, and you just got back to grinding and selling. Right. And I think part of my perception was there’s an individual he’s kind of a one man show, two man show property management company that I would refer to. I literally call him up and say, hey, man, I’m coming over with keys. Are you home at his house? And he would just come out and he’s just like trashed. He’s got washer dryer on the trailer. He’s, you know, hey, man, I’m so busy. It’s so hot. And I’m just like, I do not want to be a manager. Like, if that’s what property management is, you know? Yeah. But I think his take, he did a lot of maintenance. He did a lot of he’s a one man show and did everything right. And then I’d give him a four plex. And for him he’s like, man, I’ve got tons of opportunity there. And then when it was ready to sell, he’d refer it back to me, you know, and I would sell. And so it kind of worked. But that was my perception. And it was just so different than what property management is for us today.

Ben Bailey: Yeah, 100%. I mean, we’ve said it before, but. I think a lot of people I know for sure me, when I started here, I was like, why do all these people work here just to collect rent? Yeah, like I thought that was it, you know? And then it’s like there’s so many more facets to it.

Eric Dixon: Like, you must be knocking on every door and just. Yeah. Saying, hey, personally.

Ben Bailey: Because there’s just too many people in this office, but yeah, there’s so much more that goes into it. Um, so on the opposite side of that, tenants, residents, people who rent from a property management company. What do you think they get out of it? You know, what are they learning hopefully. Or how is that experience benefiting them. Yeah.

Eric Dixon: So and again this is another one of those things that watching from the outside. So I’m a landlord and you know own a property management company I’m in real estate. I’m on that side of the fence. But watching our clients, you know, the the tenants are our clients as well. And they deserve great service. They they demand it. And they should, you know, they demand good service. If I’m paying fees, if I’m paying rent to you guys, if you are my go to, you better answer the phone. You better be available when you say you’re available, you know, that sort of thing. So I think there’s there’s certain things that as an industry, I think tenants deserve and it’s good service, quality communication, you know, timely responses and that sort of stuff. But as far as, um, there are a lot of residents who prefer property managers over a self manager because they’ve gone through experiences that prove otherwise that are like, yeah, it was great self managing. Until I text the owner, he just ignores me and I don’t know where he lives. They don’t have an office. You know he blocks my number. Yeah. But then when the first rolls around, man, he’s on my doorstep to collect rent or, you know, so many, um, so many of our residents. They prefer managers because there’s a business, there’s reviews online, there’s hours of operation.

Ben Bailey: Yeah, there’s.

Eric Dixon: Hours of operation. There’s actually a physical brick and mortar. There’s an agency, a state agency that supervises and licenses us. You know, a self manager does not have to be licensed. They could be a criminal. They could be you could be renting from an owner. Yeah. They own the house. But did you know they you know they have a pass that you have nothing. Yeah. You don’t know about them and they’re standing at your doorstep. You know, there are just these extreme examples that are reality. And so I think it’s fair to say that residents deserve just as high level services as our owners that hire us initially. Yeah. And so we try and provide things like the portals. We have smart lockers out front, just like those Amazon partial parcel lockers where they can they can access their keys, drop off keys, pay rent 24 over seven. Yeah. In a safe, secure room. You know, it.

Ben Bailey: Shocks me how many people use it at, like, 3 a.m.. Yeah. You know, we’ll get a ding from the camera and I’ll look and be like, dude, a guy picked up his keys last night at 3:30 a.m., and that’s obviously just what worked best for him. Yeah.

Eric Dixon: And some of them work days there. Yeah. They, they work nights or they, you know, it’s if it’s in the summertime and it’s 115 during the day they move at midnight, you know. And so absolutely. So it is a really cool. Those are the types of things that do we need a locker system invest in that and the technology in order to attract owner clients. No our owners don’t even know about it. Most of them, you know, some of them do with the new marketing and stuff. But we do it because we want the resident experience to be just as good, right? So it’s like, hey, we’re going to invest in the owner’s portals. We need to invest in the tenants portals and the residents portals. I keep on saying, tenant, we’re trying, you know, the new the new word is resident. And yeah, I really think it has a better connotation. I think it’s like a new up and coming like, no, they are, I do unfortunately, the word tenant, I think even on the news it’s like this bad word or something. Yeah.

Ben Bailey: It’s become kind of like has like kind of a derogative connotation.

Eric Dixon: Yeah.

Ben Bailey: Which, which it should not. It’s just a straightforward word. But when you hear those two together, tenant and resident, you know, resident does just sound like mean. I’m a guy who does marketing all day and it’s like I residents a better word, you know? But it is hard to unlearn that, you know, where it’s like we’re not saying tenant because we’re looking down on them. Well, I.

Eric Dixon: Think, you know, to me it’s like the tenant. Yes, they rent the house and it’s just they’re renting it. It’s not theirs. Resident to me, they reside in the home. It is their home, right. It’s their 100%. It is their. So anyway, I mean, I’m on a tangent, but I just caught myself saying tenant resident tenant resident. Yeah. And listeners are probably like which one is it. Or maybe is there a difference. Yeah.

Ben Bailey: But technically the same thing. I think too, we talk about a lot. You know, there is a perception, I think, for residents saying, oh, you’re just on the side of the owner and they don’t realize that like that. That’s not our job to just be on the side of the owner, you know, like our job is to protect them as well. And there are so many occasions where we’re telling an owner like, no, you can’t do you can’t do that.

Eric Dixon: Yeah. Like, you know, there is the, the tenant, the kind of the handbook or the law, the statutes that, that are, that are existing around tenants and landlords is the Tenant Landlord Act. It’s two sided. It protects both parties, protects both parties. And we have a fiduciary responsibility to both. We can’t say, hey, the owner hired us. Sorry, hit the road. You know, this is what it is. It’s like, no, there’s laws. And part of our job is to keep the owner in line and keep the tenant in line. Yeah. You know, and make sure that that those lines aren’t crossed. And I think so that’s another benefit is, you know, if you’re considering renting highly, consider renting from a property management company because they are held to higher standards. Yeah. And if they’re not, you know, upholding to those standards, you can go after them. You can get out of your lease. You can do different things. Yeah. There’s things to protect you.

Ben Bailey: Well, and we’ve said this so many times, but it bears repeating is that, you know, there’s honest mistakes a landlord might be, you know, accidentally doing something illegal, you know, when according to fair housing or something, you know, you can’t bring an essay in here or whatever. And a property management company, it’s our job to know. Now, wait a second. You know that actually they’re protected from this, you know, and and it’s not too you know, it’s not that anybody’s trying to be malicious to anybody else. It’s that, you know, we’re the experts, and our job is to be on the side of everyone you know.

Eric Dixon: Well, you want you want them to have that security and that mindset of like, my property manager has my back. Yeah, the landlord owns the home, I know that, but they have my back, you know. And so we try and just go out of our way to offer other benefits and different things. Some others off the top of my head are credit reporting. Huge like is a new big one. It’s a big new one for us is that when you pay your rent on time, you. You’ll have a positive impact on your credit score versus before it was. We only report when it’s negative, which is really.

Ben Bailey: The case with a lot of places.

Eric Dixon: That’s the.

Ben Bailey: Standard.

Eric Dixon: Standard, yeah.

Ben Bailey: Um, but Ryan is such a huge bill that you’re paying every month to get the positive.

Eric Dixon: When you think about it, it’s kind of it’s it’s kind of unfair. The whole credit system is a whole separate topic, but it’s kind of like you have to get in debt to get a good score, and then you need to pay that debt off, but you got to pay it off or else it’s going to go down. It’s like, what’s the balance? And then if you rent and you’re not getting positive scores, it’s like, how am I supposed to build towards my goal of home ownership if that’s my goal? Right. Or or maybe your goal is not a home ownership, but I want good credit so I can get a good car loan or good student loan or whatever. So, um, the only other thing I made a note of that I thought was specifically important is when you use a property manager as your landlord, you know, your source of your rental, then the property manager is very likely vetting the vendors that are going to go into your home. So you think about that and it’s like some of the self managers are like, oh yeah, the plumbing’s broke. I’m going to send my uncle over. He’s a retired plumber. Yeah. And it’s like, that’s great. Maybe he is a retired plumber, but how do I know that they’ve been vetted background checked. Yeah. They have a they could.

Ben Bailey: Be a retired plumber who just got out of jail, you know.

Eric Dixon: That’s right. And I feel like I’m kind of saying extremes, but I’m also not like like the vendors we use that have some of them have commercial vehicles, they have cdls. That means they don’t have bad driving history. That means they’re not convicted felons recently. You know, there’s they are vetted in a certain way, not only for craftsmanship and safety and stuff like that, but also for quality of work and punctuality and that sort of stuff. So you should be getting a higher quality maintenance, you know, response time and quality when you go through a property manager.

Ben Bailey: And it’s a peace of mind. You know, we kind of were joking about the example, but it’s true of like somebody who lives by themselves. Right. And a vendor’s coming into their home, at least if they know it’s through a property management company that is a vetted and licensed vendor. It’s not like the landlord just found someone on Craigslist and gave them your address and said, well, it’s like they live by themselves, so stop by anytime they’ll be there. You know?

Eric Dixon: House is vacant. The door’s open. Yeah. No, but it’s like if they if they show up in a marked vehicle with a marked shirt and an ID badge or whatever, and they’re like, hey, I’m the plumber to fix your leak versus like, hey, I’m a, I’m so-and-so’s uncle, I’m a plumber and a green Chevy truck. You’re like, yeah, do you have any tools, dude? Like, yeah, like, I don’t know. I’m telling you, it can get crazy. It reminds me of, like, I think we’ve talked about it when you rent in, like, an Airbnb or a hotel. Yeah. They don’t do a background check on you. They don’t do criminal background check on you. Nothing. You could just, like, show up. And then next store unit could be anybody. Yeah. And it’s just like, it kind of freaks me out. Yeah. Just that came to mind.

Ben Bailey: All right, so just for fun, let’s wrap this up with talking about. Kind of the reverse of all this working in property management. What is that taught you that implies outside of management, you know, to the world in general, you know, like what skills do you think or life lessons have you learned?

Eric Dixon: Yeah. So so Taylor, he’s the founder again. And I was lucky enough for him to recruit me over and then partner with him later on and be a part of this. And he’s he’s really drilled down, especially at our annual meetings and, and really helping our employees understand, like we are not just collecting rent and facilitating maintenance, like these are people’s homes, right? Like this is a it’s there’s a Maslow’s hierarchy of needs. Right? Is like you need food, water, oxygen to live. Right above those three is shelter. So it’s like that is a basic human need. Like it’s a lot of people are fighting that. It’s a human right, right to have housing. Right. So it really is something that’s like, yeah, some of them are big, nice, beautiful homes. Some of them are extravagant, some of them aren’t, you know. But all of the homes we manage are somebody’s home. Yeah. And so it is kind of cool that it’s like, hey, we are providing housing for people. We are helping investors, you know, manage their investment. We are helping, you know, a lot of residents on their path towards home ownership.

Eric Dixon: We are doing a lot of cool things in these people’s lives. And then it just so happens that the day to day is real busy and real crazy, and a lot can happen and there’s a lot of feelings and emotions, but the underlying reason we exist is really cool. Yeah, you provide housing for people like that’s it’s actually really cool. So I think that that’s one of the biggest things that I’ve learned. I’ve also learned as an investor side of it is I’ve had to practice what we preach, like even on this podcast, the stuff we say, and then I’ll go list my rental and I’m like, do you know what? Start a little high and then I’m like, wait, we just told everybody, yeah, market it at market rate. And then my thing didn’t rent until I lowered it and then it rented like, yeah, I’ve learned over and over like you just have to practice what we preach. Yeah. And property management is not this crazy. You know, it’s not rocket science. It’s basic. Yeah. Housing and basic market stuff.

Ben Bailey: So we even mentioned this yesterday when we put it together. But like it’s. Probably the oldest profession, right? Like you go back to like the Bible and it’s there’s always a discussion about somebody owns this, the inn or the home and they got to pay, you know, their tax or their rent or whatever. And I think it’s so cool. Like before I started working here. Yes, I had the perception it was just collecting rent, but I even with all the other facets to it, as I learned, I couldn’t imagine that there’d be innovation, that it would still be changing. Right. It’s just the same, right? They’ve been doing it since then. It’s got to be the same.

Eric Dixon: It’s almost like sometimes we make it harder than it is. Like you say that and you’re like, dude, they did it back then. Yeah, probably like had a frigate, like, etching it in a stone. Dude, you paid, you know. But but you’re right. It’s one of the oldest, like, simplest things is somebody owns something and you want to use it or make it yours, and you pay them for that service or whatever it is, and it’s an exchange of value for money or whatever it is. I mean, that’s super interesting. Yeah, it’s been around forever.

Ben Bailey: It’s still still evolving. You know, like think of self showings, you know, which have come up in the last few years, 3D tours, our locker system that we talked about, like these are things that, you know, a few years ago didn’t exist.

Eric Dixon: Every single day we get applications that walk through a 3D tour online. They never went to the house. They applied, they paid their deposit, and they’re moving in in 3 or 4 days. Yeah. And they have not left their couch.

Ben Bailey: Yeah, yeah.

Eric Dixon: You know, and it’s like that is crazy, you know. And so and then there are some that have gone super old school that are like they walk into the office and sit down at a computer and do the application and give us a check. And do you know, it’s like some of it, it’s just always evolving, you know. Yeah, that’s very cool. That is super interesting.

Ben Bailey: All right. Well that is it for us this time.

Ben Bailey: Be sure to follow the podcast wherever you listen and leave us a five star review if you can. It really helps out and we will see you guys next time.

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On Q Property Management is a full-service Property Management company specializing in managing residential rental properties. On Q’s client-first approach – utilizing a proprietary process and set of tools – delivers a more transparent and profitable property management experience. With year-long tenant guarantees and a no-fee cancelation policy, On Q is dedicated to earning you business month after month. 

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