How many properties can one person manage varies. It depends on your personality, whether you have a day job, and what your day job is. That said, I can give you some guidelines.
It may not be a hard question to answer. If you’re asking the question, there are really only two reasons. Either you are probably just starting out, or you’re close to your limit.
I know people who draw the line at two and people who draw the line at 100. So that’s why I say it varies. Personally, I found that once we got to around seven units, it started interfering with my job.
What to do if property management interferes with your day job
If you reach the point like I did where property management starts interfering with your day job, you have a decision to make. It’s time to consider whether to manage properties full time.
The first question is whether you’re able to make enough off property alone to live on. Keep in mind the average income for a family of four is around $52,000. Only you know how far above or below average you are willing to be and whether those numbers can work.
The second question is whether you can buy health insurance. If you or your spouse have a pre-existing condition, health insurance could be complicated. I would advise against making that decision in 2017 if at all possible, since the answer could be different in 2018. I’m not being political here. Transferring risk is a business decision, and this is a risk you need to transfer, just like homeowner’s insurance.
The final question is your vacancy rate. If your turnover is higher than you want, using a management company makes sense. A management company can get more applicants than you can on your own, so they can be pickier than you. You can shorten your vacancies considerably by making sure your leases begin and end in the spring or summer. But if you’ve done that and vacancies still affect you, a management company can help.
Other things a management company can do for you
Besides finding you better tenants, a management company can usually get you better deals on maintenance, since they have higher volumes than you do. They also reduce the amount of time you spend on the phone.
The management company collects the rent, enforces late fees, and acts as a buffer between you and the tenant. Your tenants are more likely to ask you for things after they see you at their kids’ school or at the grocery store. I know this from experience. Sometimes they ask for something cheap and sometimes they ask for something that costs a thousand dollars. Setting boundaries helps, but doesn’t completely eliminate the problem. If you’re regularly spending more than a thousand dollars per property on maintenance, you may need a management company.
What part of landlording do you enjoy?
Ultimately, you have to do what makes you happy. If you like the part of the job the management company does, then don’t outsource it. Stay at the number of properties you’re at, or sell down until you get to a number you’re comfortable with, and manage them yourself.
If you’d rather leave the day to day managing to someone else so you can concentrate on the long term planning aspects of landlording, then keep your day job, outsource the management, and spend your time acquiring more property.
There’s no right answer to this part. You enjoy what you enjoy.
How many properties can one person manage
So, even though it’s a bit of a cop-out, I can’t tell you how many properties can one person manage. Everyone’s a little bit different. But I can’t help but think of a conversation I heard years ago. Two old dudes were talking after having not seen each other for a while. “I got gout,” one said to the other. “You’ll know when you get it.”
I never thought I’d compare landlording to gout. But I do think the limit is like that. You’ll know when you get it.