Property Manager Interview: Analyze Correct Rents, Increase Cash Flow, and Streamline Maintenance
Ladies and gents, we are proud to present our first installment of a series of interviews on the team that you need to assemble as a new investor. Nearly every real estate investing book will tell you it is important that you assemble your “core team” the moment you start down the real estate investing path. Our own experiences confirm this as well and we firmly believe a core team is essential to your financial success. A typical support team is generally composed of your banker, accountant, financial advisor, attorney, property manager, and home inspector. Some of you may have a modified list based on your personal skill set, but we think most people can identify with this list.
Since we feel so strongly about the benefits of an advisory team, we created this video interview series to get inside the minds of these key folks and ask the questions every new investor should be asking as their own teams are formed. We hope you enjoy watching and learning from these experts as much as we enjoyed putting them together.
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Have you been wanting to speak to a property manager and don’t know where to start? We highly recommend talking to one in order to get personalized treatment, but if you prefer to relax in the comfort of your own home and let us cover it, watch Jeri Frank, CEO of AssetRover, interview Andy Petzold, Co-owner and Broker of EPIC Property Management in Cedar Rapids, IA.
Enter Andy Petzold
Andy Petzold is no “spring chicken” when it comes to real estate investing. Although his company, EPIC Property Management, has been open to the public for 5 years, Andy and his team started offering services as a private group over 12 years ago. He is highly regarded in the community and just recently, Andy was called upon by KCRG TV in Cedar Rapids, IA to do a segment as one of their resident real estate experts. EPIC offers property management services for residential properties, single family homes, multi-unit apartment buildings, and pretty much whatever you can toss their way. 80% of their managed properties, a portfolio of around 430 properties, is currently single family homes, but they manage apartment buildings as large as 120 units as well.
“I like the idea of a tangible object that I can invest in, drive by and look at, and get my hands on for repairs.”
– Andy Petzold
“Me personally, I’ve always looked at real estate as one of the vehicles for investment that I felt the most comfortable with,” said Petzold. “I like the idea of a tangible object that I can invest in, drive by and look at, and get my hands on for repairs. I think out of all the different ways someone can invest their money, real estate is unique in what it offers both the investor and also what you can offer back to the community […] making housing available for people who have a need.”
Take heed of the advice Andy gives for new real estate investors. “I think the golden rule for real estate, and probably any investment, is to plan for the worst-case scenario. Plan for everything to go wrong and be patient to know that what you’re getting into is the right move.” In this interview, Andy warns not to get too emotional and caught up in your own deal. “Maybe it’s not your deal and you just have to be willing to be patient enough to wait for the next one–the right one,” said Andy.
What Does a Property Manager Do Anyway?
We’ve talked about property managers and you’ve probably heard the benefits. You don’t have to have one, but managing your own property isn’t for everyone. Typically a new investor tells his/her friends, ”I’m going to invest in real estate.’ The first thing they all say is, ‘so that means at 3 am you’re unclogging someone else’s toillet?’ A property manager takes care of that. I think larger than that though, it really is about an end to end service. You want be able to attract the tenants you need to fill [your] place, but also be able to handle anything that would come up as far as when times are good and we’re collecting rent […] to when things go bad and you’re looking at an eviction or lawsuits,
things like that.”
“Your property mgr should be able to look at the situation and say, ‘This is going to be okay and this is how we’re going to get through this. We’ll be together on the other side and it’s going to go well.”
But I Can’t Afford to Pay the Fee!
We often hear concerns from real estate investors when it comes to management fees. Their margin for positive cash flow is already low and they feel forced to manage themselves to save that 10-12% a year. In reality, most investors who go it alone have a hard time pricing their property at market rent rates. You may be surprised in what you hear in this interview, because if you are inexperienced and going at it alone, you may be leaving a lot of money on the table. “The rents charged by individual operators tend to be all over the board, but generally they’re low,” said Andy. “We’re usually able to account for our fee just by what we’re able to do for them. The difference in our cost vs. what [the investor was] losing…we’re usually able to account for our fee just by what we’re able to do for them as far as increased rents, or lower maintenance costs by providing some of other services we offer.”
“We’re usually able to account for our fee just by what we’re able to do for [the investor].” – EPIC Property Management
We hope you enjoyed this property manager interview with Andy Petzold at EPIC. If you want to hear even more from Andy, check him out on KCRG TV 9’s recent segment where he discusses the Cedar Rapids, Iowa real estate market!
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Before you leave:Don't forget to check out our free rental property calculator. This will be a valuable tool in your arsenal as you analyze your existing or potential rental properties.
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