OT-Should I use a Property Manager?

[Former SD resident]

For those of you with rental properties (and live far from them), do you use PMs for those properties?

Its a long story but we may be renting out a 5bd/3ba in Mira Mesa. The house is paid off with 1 mentally disabled person living there. The executor (family member) wants to move them into one of their properties (other preperties are also rented to family) and sell the MM house. I feel like it’s them wanting to have a guaranteed renter, while they build equity and once the proceeds are gone from MM house dump them in a state run home.

I feel like it would be benifitial to keep the house, rent it and use the proceeds to pay living expenses at new place. Don’t think executor wants to handle real rental. I would be willing to manage (I live in OC), but don’t know if it’s too much to take on. The home is old and not updated, but is big so I think it would make a good rental. I’m down in SD at least once a month anyway. So for those that do it, is it hard or would you hire someone to do it?

[The-Shoveler]

That’s not far away.
But dealing with renters can be extremely stressful, dealing with a bad PM can be even worse.
Hiring a good PM is like finding a Good tenant. not so easy to do in reality.
Your call.

[CA renter]

Former,

Do you have any trustworthy family members or good friends in the SD area? If so, they might be willing to handle any emergency situations if you’re not able to come down on short notice. I used to help manage my family’s properties in LA when they were living out of county. I’m sure they wouldn’t mind helping out for free or for much less than a PM company.

I also agree with your suggestion for using the house as a rental to help pay for your relative’s expenses. Of course, it also depends on how much deferred maintenance is involved, because it might skew the situation in favor of selling, especially if you think this is a RE top because of the low inventory/high interest rate environment.

[UCGal]

I’m a little confused by the post.

– You have a family member who is mentally disabled, who currently lives at the house in question.

– The executor wants to move this person, and rent the MM house, diverting some of the rental income to cover the displaced family persons expenses.

– You’re worried this will only be temporary, and the family member will end up in a nursing home environment.

I’m not sure how renting the house out vs selling it plays into the eventual situation for the displaced family member.

The executor is the person who decides, typically.

Does the mentally disabled person have a legal guardian? That person should be advocating for them.

I assume this MM house is an asset owned by the estate (since there’s an executor) with multiple beneficiaries… depending on what the will or trust says – the executor has to follow that. But if it’s loosely worded – the executor makes the decisions.

My husbands family has had huge drama over real estate left to multiple people to share. It can get really ugly and break families apart.

As far as property management… My husband kept his pre-marriage house as a rental when got married – he managed it himself. It wasn’t a big deal, since he kept it in good repair and had good tenants. When we moved to CA, he hired a property management firm. They managed to nickle and dime him and he ended up spending vacations doing simple repairs he’d already paid the management company to fix. So I’m not so keen on PM companies. I’m sure there are good ones… but there are a lot of bad ones too.

[EconProf]

If UCGal’s assumptions are correct, why not sell the MM house now and get the disabled person into a living situation that makes sense, whether a smaller rental or assisted living place. It certainly makes no sense for them to stay in a 5-bedroom house.
A big, older house like that will likely get a big family and plenty more wear and tear on the house and yard. Whether it is sold now or later it certainly makes sense to do a total fix-up and paint-up beforehand to maximize the price.
Property managers usually get about 10% of the rent, and are seldom worth it. Unlike the owner, they seldom have the incentive to minimize costs and they have lots of leeway for shenanigans in hiring and contracting work to be done, taking their time in renting it out, etc.

[FlyerInHi]

From OC to SD, you can easily manage your own property.

I manage my own properties. I even do my own work as I’m not afraid of some plumbing work or what not.

For properties where I don’t live, I still manage my own. But I built a roster of connectors and handymen I can call. I talk to the neighbors and wherever I see propel doing work, I stop and ask for a business card or phone number.

I have a Canadian friend. He bought 8 condos and manages them remotely.
He even got his tenants to deposit rent to his US bank account.

You have to screen your tenants carefully and be a good judge of character so you don’t end up with a loser who won’t pay, or an ass who will trouble you all the time.

It’s an art more than a science. But you have to develop your own rules and apply them deliberately.

[Former SD resident]

[quote=UCGal]I’m a little confused by the post.

– You have a family member who is mentally disabled, who currently lives at the house in question.

– The executor wants to move this person, and rent the MM house, diverting some of the rental income to cover the displaced family persons expenses.

– You’re worried this will only be temporary, and the family member will end up in a nursing home environment.

I’m not sure how renting the house out vs selling it plays into the eventual situation for the displaced family member.

The executor is the person who decides, typically.

Does the mentally disabled person have a legal guardian? That person should be advocating for them.

I assume this MM house is an asset owned by the estate (since there’s an executor) with multiple beneficiaries… depending on what the will or trust says – the executor has to follow that. But if it’s loosely worded – the executor makes the decisions.

My husbands family has had huge drama over real estate left to multiple people to share. It can get really ugly and break families apart.

As far as property management… My husband kept his pre-marriage house as a rental when got married – he managed it himself. It wasn’t a big deal, since he kept it in good repair and had good tenants. When we moved to CA, he hired a property management firm. They managed to nickle and dime him and he ended up spending vacations doing simple repairs he’d already paid the management company to fix. So I’m not so keen on PM companies. I’m sure there are good ones… but there are a lot of bad ones too.[/quote]

thanks to everyone for responding. to answer your questions UCG. yes the person lives in the MM house, she is mentally disabled (bipolar, manic depression), they don’t have a legal guardian. I agree with getting her out into a more suitable place, but question selling the house leaving basically a pot of gold for the relative/executor to tap into for their rental property they plan to rent to her. executor has already said they they could just kick her out if the time came when they needed their property back, but then what. it’s not a huge estate, but still enough to be tempting to drain. I believe it’s written to offer the executor a lot of leeway. do beneficiaries get a say? can they become the executor?

I haven’t seen the house in several years, but she never did anything to maintain that house, she would always just bug her mother (before she passed) to fix things for her. major things have been fixed as needed through the trust, but I’m sure the cosmetic features of the house look original to the 70s and r in poor shape. and she’s had lots of animals over the years that have been allowed to take over home.

I imagine the entire house will need to be painted along with cheaper updates to kitchen/baths. Even as is I think the house could go for around 450k (fee to sell 18-22k) and rentals for comparables range from 2000-2400. I think if we spent that money that would be lost to commissions on the house we could make it a great little rental, and hopefully finding choice tenant by pricing it in the low end, which would still cover most of there living expenses.

family issues with money are never usually pleasant, I get along really well with the executor, but I also knw that they are going through a few issues and don’t want the trust to be there way out. I don’t want to damage the relationship, but I question the desire to sell. as you can imagine there are so many more details to this. I hope to talk to them this weekend to get a batter idea of plan and hope I will be satisfied.

[Jazzman]

I have several properties all managed by managers. Two managers have provided a good service, another so so, and one let me down big time. None is in soCal where I struggled to find property managers. I learnt my lesson which is you need to manage your property managers. Apart from that you can get on with your life and pay someone else to do the dirty work. For just one property and on my doorstep I’d ask an agent to find a tenant and manage it myself.

[Author]

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