BiggerPockets Real Estate Podcast: Pro’s Guide to Property Management – Work Less, Make More from Your Rentals!

Host: Dave Meyer
Guest: Solali Kalavor, Property Manager and Real Estate Investor
Release Date: March 12, 2025

Introduction

In this insightful episode of the BiggerPockets Real Estate Podcast, host Dave Meyer delves into the intricate world of property management with expert Solali Kalavor. Aimed at real estate investors seeking financial freedom, the conversation navigates the complexities of hiring property managers, maximizing rental income, and the delicate balance between managing properties personally versus outsourcing this task.

Guest Introduction

Dave Meyer welcomes Solali Kalavor, a seasoned property manager based in Seattle, who brings a wealth of experience from various facets of the real estate industry. Solali shares his unique journey from a finance and investment background to establishing a successful property management business.

Solali Kalavor:
"Having a loan signing business was nice, but seeing the true outcomes of owning real estate inspired me to pivot into property management."
[03:05]

When to Hire a Property Manager

The discussion begins with the fundamental question: Is hiring a property manager worth the investment? Solali outlines key considerations for investors contemplating this decision.

Key Factors to Consider:

1. Risk Tolerance: Assess how much risk you're comfortable handling personally versus delegating to a professional.
2. Opportunity Cost of Time: Self-managing typically consumes 40 to 70 hours annually. Solali emphasizes the potential to reinvest this time into other profitable ventures or personal endeavors.

Solali Kalavor:
"What's your risk tolerance? What's the opportunity cost of your time to manage the rental yourself?"
[06:55]

Vetting Questions and Evaluation

Selecting the right property manager is crucial. Solali provides a framework for investors to effectively evaluate potential managers beyond surface-level promises.

Essential Vetting Questions:

1. Past Performance: Request specific examples of how the property manager has successfully met similar goals.
2. Granularity of Plans: Assess how detailed and realistic their strategies are for achieving rental income targets.

Solali Kalavor:
"How granular can they be about describing the success that they expect they can achieve for you?"
[08:20]

Dave Meyer:
"People who say no and are clear about what they can’t do often prove to be more reliable and trustworthy."
[09:21]

Choosing Between Small vs. Large Property Managers

Dave and Solali explore the pros and cons of property management companies of varying sizes. Solali advocates for partnering with property managers whose business scale aligns with the investor's portfolio size, ensuring personalized attention and mutual growth incentives.

Solali Kalavor:
"I like to work with property managers who have a footprint of about 25 to 30 miles, specific to our metro here in Seattle."
[14:15]

He warns against large, national firms that may prioritize high-volume clients over smaller investors, potentially leading to diminished service quality.

Dave Meyer:
"If you're a small investor, partnering with a similarly scaled property manager creates a mutual incentive and alignment about where you're both trying to go."
[16:08]

Day-to-Day Operations vs. Asset Management

A pivotal part of the conversation differentiates between property management (day-to-day operations) and asset management (strategic oversight). While many property managers excel in handling daily tasks, asset management requires a long-term vision to maximize property value.

Dave Meyer:
"Asset management is about thinking like an owner and taking a bigger, longer-term view of your asset."
[20:01]

Solali underscores the importance of property managers who can offer strategic advice, such as optimizing property usage, planning renovations, or navigating market trends to enhance investment returns.

Solali Kalavor:
"We had a client losing $185,000 a year due to self-managing. By hiring professional management, he could redistribute an additional $100,000 a year in income."
[26:08]

Importance of Relationship and Alignment

The episode emphasizes the critical role of building a strong, trust-based relationship with your property manager. Both Dave and Solali agree that mutual understanding and alignment of long-term goals are essential for successful property management.

Solali Kalavor:
"It's very important how well you like them and how well they understand your goals."
[14:27]

Dave echoes this sentiment, highlighting that having a property manager who shares your investment philosophy ensures smoother operations and better handling of unforeseen challenges.

Dave Meyer:
"You want someone who’s going to treat these scenarios in a way that you're comfortable with."
[15:34]

Insights and Tips for Investors

Solali offers practical advice for investors considering self-management versus hiring professionals:

1. Conduct a Cost-Benefit Analysis: Compare the time and financial investment required for self-management against the fees and potential income increase from hiring a property manager.
2. Leverage Online Resources: Utilize platforms like BiggerPockets for education and tools to streamline property management tasks if opting to self-manage.
3. Delegate Strategically: Focus on delegating tasks that are not your strengths or are time-consuming, allowing you to concentrate on expanding your investment portfolio.

Solali Kalavor:
"Ask yourself, is this something that may better yet be something I can delegate as another vehicle of my financial independence?"
[31:50]

Conclusion

The episode wraps up with Solali’s final thoughts on property management, emphasizing the importance of understanding your investment "why" and choosing a property manager who aligns with your long-term goals. Dave encourages listeners to utilize BiggerPockets’ resources to find professional property managers who can help optimize their real estate investments.

Solali Kalavor:
"Focus on the why, and then the who will come."
[33:51]

Dave Meyer:
"If you're interested in working with great professional property managers like Solali, use our property manager finder on BiggerPockets for free."
[34:41]

Notable Quotes with Timestamps

• Solali Kalavor:
  "What is your risk tolerance? What is the opportunity cost of your time to manage the rental yourself?"
  [06:55]

• Dave Meyer:
  "People who say no and are clear about what they can’t do often prove to be more reliable and trustworthy."
  [09:21]

• Solali Kalavor:
  "I like to work with property managers who have a footprint of about 25 to 30 miles, specific to our metro here in Seattle."
  [14:15]

• Dave Meyer:
  "Asset management is about thinking like an owner and taking a bigger, longer-term view of your asset."
  [20:01]

• Solali Kalavor:
  "Focus on the why, and then the who will come."
  [33:51]

Key Takeaways

• Evaluate Your Needs: Before deciding to hire a property manager, assess your risk tolerance and the opportunity cost of managing properties yourself.
• Vetting Process: Use detailed, specific questions to gauge a property manager's ability to meet your investment goals.
• Scale Matters: Choose a property management company that aligns with the size and scope of your investment portfolio for personalized service.
• Strategic Asset Management: Seek property managers who can provide strategic oversight and long-term asset management, not just daily operations.
• Build Strong Relationships: A trustworthy and aligned relationship with your property manager is essential for navigating challenges and achieving investment success.

This episode offers a comprehensive guide for real estate investors contemplating the role of property management in their investment strategy, providing actionable insights and expert advice to help them make informed decisions.