What's the diff between good property mgt. company and bad one

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What's the diff between good property mgt. company and bad one

Benny Gelbendorf
Holon, Israel · Member since 2018 · 86 posts · 14 votes

Hi BP,

I've heard too many horror stories on property management companies that are not doing their job properly (i.e. do not provide best advice on hazards, termites, do not try to save money when it comes to minor and major fixes around the house and in general do not act as the owner proxy and serve his best interest).

From one hand, for 10% (especially on low income neighborhoods) I realize (but not understand) that I can not expect property manager to take care of my house as its own. On the other hand, this is what I'm paying for, no ?

Please let me know, am I expecting too much ?

Have a super day,

Benny

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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
8y

Tough question bc there is no perfect property managment company out there. Even the ones that have the most professional set up can still have issues. 

Management companies are in the business of making money. There are usually fees for everything but they are not making money unless they have your home occupied so I would like to think that the goal is to not just throw anyone into the home.  

If the management co qualifies the tenant and they pass, once the tenant is in the home they then hope that tenant pays their rent on time every month and stays for several years. 

Good luck

Curt Davis - KAIZEN Realty538 Reviews
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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    8y

    Tough question bc there is no perfect property managment company out there. Even the ones that have the most professional set up can still have issues. 

    Management companies are in the business of making money. There are usually fees for everything but they are not making money unless they have your home occupied so I would like to think that the goal is to not just throw anyone into the home.  

    If the management co qualifies the tenant and they pass, once the tenant is in the home they then hope that tenant pays their rent on time every month and stays for several years. 

    Good luck

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
    1Reply
  • Benny Gelbendorf
    OP
    Holon, Israel · Member since 2018 · 86 posts · 14 votes
    8y

    Thanks for the explanation @Curt Davis but If I'm not mistaken the property mgt. company role does not end on assigning a resident and collecting rent.

    What about ongoing fixes around the house (broken appliances, electricity issues, etc.) ? Who is defending my best interest when it comes to those issues ? Shouldn't that be the property manager ? getting best professional for the job with lowest bid ?

    0Reply
  • Mark Fries
    Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes
    8y
    let me know when you find a good management company....all I know are mediocre and poor ones... you are looking for something that does not exist.
    0Reply
  • Natalie Schanne
    Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
    8y
    Benny Gelbendorf - Sounds like you may want to manage properties yourself. If you buy in higher quality areas (higher income, credit score), you’re less likely to need to evict. Most issues can be solved by the tenant - that is the tenant meets the plumber directly to solve the leak issue, then the plumber bills you. You call around in advance to find a cheap plumber. Most PMs would rather get the job done than to nickel and dime their vendors (get the lowest price). I also find that sometimes I spend hours researching semi trivial things for my properties. If I buy the more expensive hot water heater, will it last twice as long? You never know. I bought a house 8 years ago thinking I need to change the furnace and AC and the furnace and AC is still working fine. (Spent more $$ On AC repairs than furnace so far).
    1Reply
  • Benny Gelbendorf
    OP
    Holon, Israel · Member since 2018 · 86 posts · 14 votes
    8y

    Thanks @Natalie Schanne , From the few comments it seems like I'm looking for a unicorn.

    To reiterate what you said, I have to find out professionals of my own (plumber, electrician, etc.) and have a property mgt. company, only to place tenants and collect money only.

    Assuming, placing a new tenant they charge separately and as for monthly fee they charge 10% of the rent, the cost seems kind of steep, don't you think ? Or am I missing something here.

    0Reply
  • Natalie Schanne
    Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    @Benny Gelbendorf - I’m confused. Why do you need a PM at all? It’s very easy to find tenants. In USA, Zillow, Craigslist and Facebook let you post for free. I’ve never paid someone to find me a tenant in 8 years. Also, If you get a good quality tenant they will pay direct to your bank account or mail you a check monthly. The only thing you need to do is deposit the check and track your income and expenses for taxes 

    0Reply
  • Benny Gelbendorf
    OP
    Holon, Israel · Member since 2018 · 86 posts · 14 votes
    8y

    I wanted property manager since I thought he/she will operate the property during permit inspection, ongoing maintenance, rent collection, finding tenants & oversee property follow local rules and laws (as I'm out of state investor).

    But now I understand I've set the bar too high.

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    8y
    Originally posted by @Benny Gelbendorf:

    Thanks for the explanation @Curt Davis but If I'm not mistaken the property mgt. company role does not end on assigning a resident and collecting rent.

    What about ongoing fixes around the house (broken appliances, electricity issues, etc.) ? Who is defending my best interest when it comes to those issues ? Shouldn't that be the property manager ? getting best professional for the job with lowest bid ?

     Benny, the management company will also take care of the repairs for you and even handle the eviction process should that ever happen also.   Most management companies when it comes to repairs will only provide 1 quote and you either take their quote or you can find someone on your own to get a repair quote. 

    The management company, when a tenant calls in with an issue they are looking to address it quickly. Depending on the expense of the repair you might be notified on it as well just to keep you in the loop.  

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
    1Reply
  • Will GastonPro Member
    Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
    8y

    @Benny Gelbendorf I think it's always a good idea to lower your expectations in RE investment. 

    PMs have a very difficult job and I'm of the belief that a 10% fee doesn't support the model for "great" property management. 

    There are certainly great PMs out there, but they are incredibly difficult to find. Most of the "good" ones in my market are really just "not awful".

    1Reply
  • Dave Chow
    Investor · CA · Member since 2017 · 91 posts · 16 votes
    8y

    No PM would care your properties as the way you do.

    0Reply
  • Benny Gelbendorf
    OP
    Holon, Israel · Member since 2018 · 86 posts · 14 votes
    8y

    I understand that @Dave Chow , but as out of state investor I don't have any other alternative (yet).

    I'm looking for the best option based on current market status.

    0Reply
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