Hello, my friends and welcome to another episode of Ask Marco where I answer your investing related questions.

And today's question comes from Linda. Linda says, hello. I am currently in the process of saving up for an investment property but I am doing my research before I commit. I came across your website and it was very informative and clearly laid out, very user friendly. Thanks. So one of my main concerns as friends and family also advise me of is purchasing a property outside of my local area and then trusting a property manager with my investment. They do not always have my best interest at hand and will not necessarily do their job responsibly, which could lead me into more debt having to fix up a damaged property. I have a friend who signed her property off with a contract to a management company who acted irresponsibly and she couldn't follow through because she lived halfway across the world.

What can you say about this or what has been your experience? Thank you, Linda.





Okay, Linda, thanks for the question. Let me begin by saying that property management is very, very important. In fact, I kind of jokingly say at times that you live and die by your property manager. Property management is critically important and I like to think of my property manager as an asset manager because they are not just managing and taking care of my property, but they're managing and taking care of my assets. And those assets are important to me because my assets generate income and cash flow. And so I want them to continue to generate income and cash flow for me. And as long as they're properly managed, then they will continue to do so for decades to come. Understand the importance of property management right from the beginning, it's your property manager and the management team.

They're one of the most important team players on your team. Now what you'll want to look for is a full-service management company or a full-service property management firm. And I like to avoid real estate agents, not because I have any problem with real estate agents and brokers. They are qualified, often qualified to do property management and in many States, depending on the state, the fact that they have a license like a real estate broker's license qualifies them to do property management, provide property management services for a fee. But the problem that I've had in my own personal experience and what I hear as well from others is that property brokers and agents that are doing property management are often in moonlighting as you might say. So they're splitting their time between selling and listing residential real estate, doing property management, and potentially something else.

They may have, you know, a fuller part-time job on the side as well. I try to avoid real estate agents as property managers. I've been there and I've found out that it wasn't the best experience. Now speaking of experience, you want to look at the experience of your property managers, but also their experience with the property type that you have. So if they are experienced with single-family homes and duplexes or let's just say residential property, which are one to four-unit properties, great. That's the type of property manager you want. You don't want a commercial management company because they are managing commercial buildings, retail space, office space or whatever. Also with full-service property management firms, you'll want to consider the number of properties under management. Are they managing 10 or 20 properties or is it more like one or 200 properties? The more the better.

Typically speaking because it gives them a broader range of experience and if they have over a hundred units under management, odds are they've probably got a team of two or three people that are going to be spread across the actual leasing or management side of it as well as the maintenance side of it. And so now you've got that diversification of skills that a...