Tom Sedlack Cautions Twin Cities Landlords On The Pitfalls Of DIY Property Management

Using the analogy of doing your own vehicle repairs, Tom Sedlack of 33rd Company Property Management advises landlords in the Twin Cities Minneapolis and St. Paul, Minnesota metro area on the pitfalls of DIY (do-it-yourself) property management.

“It’s like fixing your own car, trying to change your own transmission,” Sedlack said. “By the time you figure out the problem, learn how to fix it, buy the parts, make mistakes left and right, break other things, and then finally get it fixed five months later, your investment in time and money would be five or six times what a retail auto mechanic would charge for the same repair.”

“Generally, people try and do it themselves first,” stated Sedlack. “They think they’re going to have the same results without the fee, and that’s the fallacy.” As general manager and co-owner of 33rd Company, Sedlack says many homeowners-turned-landlord exhibit signs of emotional attachment to their properties.

“They need to disconnect the train cars and understand that it is no longer a residence, it is a rental, an investment property.”

The most common do-it-yourself tasks property owners try involve maintenance. “Instead of hiring a plumber to fix a leak, they may go in there with their own tool belt and try and fix it, then further alienate the tenant,” a scenario Sedlack cautions can backfire and cause the landlord financial loss.

“Now the repair is delayed, there’s multiple trips, it’s not fixed correctly, the tenant has dissatisfaction, and they leave.” Sedlack listed the potential costs of tenant turnover: “They have to prep it, advertise it, market it to find another tenant…”

One way to decrease tenant turnover is to keep the property in great shape. According to Sedlack, “Tenants actually take better care of maintained properties. If you try to lease a home with a hole in the wall, tenants could say, ‘Well, they don’t care about that hole, so they probably won’t care about the stain that I just made in their carpet.’ That’s not the message you want to give to a tenant.”

Data released in the ebook ‘Getting Inside the Head of the Online Renter’ by SatisFacts Research, confirms Sedlack’s statement. It was revealed that the highest ranking factor for renewing a residential lease was “Quality of Maintenance Service Provided.”

Another area Sedlack sees DIY landlords lack knowledge in is the law. “It’s very easy for an owner to say to a tenant, ‘I’d rather not have a satellite dish on my roof, so go ahead and get cable.’ Unfortunately, that particular statement violates the FCC Open Air Access Law and Universal Media Access Rights—a five hundred dollar-a-day fine if you deny a tenant the ability to put a satellite dish up on the property.”

“It sounds simple and innocent, but it has pretty deep ramifications if you don’t know what you’re doing,” warns Sedlack. “You could land yourself in court as an individual landlord. Same thing with fair housing.”

A recent survey by Zillow and Ipsos, a global market research company, provides startling statistics on the percentage of landlords who lack an understanding of the laws on security deposits, credit and background checks (76%), of privacy and access rights (69%) and laws on early lease termination (50%).

Even the contracts DIY landlords can acquire at an office supply store may cause headaches down the road. Sedlack explains, “If they go to Staples or Office Max, it’s probably a good likelihood the lease isn’t even legal in the state that it’s being sold in. It’s just a generic national lease that may not have specific references to required state statutes.”

Wanting to put the headaches of DIY property management behind them, and with hopes of someday selling their properties, the DIY landlord may turn to a local realtor as their property manager, something Sedlack recalls grew in popularity at the turn of the housing market.

“The housing crash in 2008 really decimated the residential real estate industry across the board,” he said. “A lot of realtors, at that point, were not getting any significant amount of sales activity. Many homes were under water and couldn’t be sold. The short sale process was still very nebulous and not well known, so realtors ended up transitioning from realty sales into property management and offering to do leases and rentals for their clients.”

“Unfortunately,” continued Sedlack, “they were transitioning into property management without any real experience or affiliations with national property management organizations like the National Association of Residential Property Managers or the Institute of Real Estate Management. They’re effectively going into an industry they have no experience in, trying to provide agency management for individuals, yet the realtor doesn’t have any agency experience in property management.”

Circling back to an analogy using automobiles, Sedlack describes the realtor versus the professional property manager: “An auto dealership has two sides divided by a cinder block wall. On the front side is the sales floor; they’ve got salesmen that are commissioned and do sales. They do everything for free just to try and get the customer to sign that bottom line contract and buy the vehicle.”

“On the other side of that wall is the service department. Everyone’s got the sleeves of their blue shirts rolled up, they’re all covered with grease. They work on a service basis. They charge a shop fee, they charge an oil reclamation fee, and they charge an inspection fee. They’re fee-driven because it’s a service business. There’s a difference between the service business and the sales business.”

A landlord’s emotional attachment, lack of awareness of the housing market and laws, coupled with trying to perform maintenance themselves, can all add up to more trouble than it’s worth to be a DIY property manager. Sedlack asks, “Why try and do this yourself and do a bad job?”

“You want the best management company, because poor or discount management, or using realtors for property management, may not be your best choice,” he concludes. “It’s better to step it up and get the absolute best that money can buy because it’s tax deductible anyway, and you’re going to get that much better results out of having that experienced management company.”

For more on how 33rd Company can manage your property, visit:

Creator of The PRO-FOUND Process, Stephanie Miller teaches the art of promotion, discovery and recovery. A three-time best selling author, she interviews entrepreneurs on how they solve problems with their expertise.