California Attorney and Real Estate Broker Chris Adishian answers the question, “Should I hire a property management company, or self-manage the property?” at the South Bay Association of Realtors’ event, “Commercial Attorney Panel-Hot Legal Issues for Commercial Real Estate” on March 5, 2014.
Question: Should I hire a property management company, or self-manage the property?
Answer: “As an investor in a real estate asset, you have to, I think, fundamentally decide: “Do I want to act like an owner and have somebody else manage this for me and just give me the checks? Or do I want to have the operator experience? And do I want to go down and try to replicate the experience of Jim Thompson and get the 97 answers that he already knows in addition to the 3 I’m going to learn?” Do you want to have that experience?
And I liken it to any other type of investment, whether you’re a business owner: if you’re a dentist, do you want to be in there working on people’s teeth or do you just want to own the business and have people work there for you? And I also liken it to if you have securities investments: do you want to self-manage those or do you hire a financial advisor? And I think that’s a very very important decision at the outset in terms of how you’re going to relate to your investment in real estate.
And the other thing I would say that’s really a key to success, and it goes back to what I was saying earlier, is tenant selection. The fundamental thing about law that I learned was that the most important term in the contract isn’t in the contract; I could have saved 3 years of law school. It’s dealing with honest, fair-minded people. It doesn’t matter what the rules are. If you have a tenant who’s honest, fair-minded, and operates in good faith, and you do the same as a landlord, you’re not going to have any problems. But if you have a poor selection process and you let anybody into your buildings, well you’re going to get any sort of outcomes. And you have got to comply with the laws and not discriminate and do all those things, but if you do a good tenant selection on credit quality, you’ll solve a lot of your problems because they won’t crop up ever.”
Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.
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