Prop mngmt co charges % of repairs plus mo fee.

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Prop mngmt co charges % of repairs plus mo fee.

Daniel B.
Rental Property Investor · Saint Louis, MO · Member since 2012 · 115 posts · 42 votes

Hi,

My small local property management company sold out to renters warehouse. I have not been happy with them, but have been hesitant to switch again since tenants just got a lot of paperwork with the last switch and it’s kind of a pain on my end.

Renters warehouse charges a flat monthly fee, plus a fee for lease renewal and new leases. I am fine with that, but in addition they charge 10% of any repairs. They say it comes from the contractor and it technically does, but obviously the contractor charges more to cover it.

Do most property management companies do this? Seems like a rip off and there is no incentive to keep repair costs down...

Thanks in advance

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  • Nathan CrossBusiness Member
    Investor · Saint Louis, MO · Member since 2019 · 146 posts · 66 votes
    6y

    Daniel, I will tell you all PM Companies charge a maintenance fee, since they are scheduling and ensuring the repair is done right. Now a good PM would track these cost, so as to make sure their client, which is you is not getting hit hard for all these maintenance cost. If that is the case the PM compnay needs to find a contractor that understand this concept and that repeat business is better than no business. 

    Have you tried to talk to your PM company about the cost? If this property always having maintenance request? Are these repairs considered normal wear and tear or are they caused by the tenant? When was the property or properties evaluated for any repairs or CPAEX rehabs to be done?

    I ask these questions, because as an investor and owner of a property you have your level of responsibility to the properties and the tenants as well. 

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    6y

    Many do, 8-10% upcharge is what you typically see on the ones that do. 

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  • Tim JacobPro Member
    Real Estate Agent · Baltimore, MD · Member since 2016 · 520 posts · 379 votes
    6y

    Most have affordable handymen and know the sort of things they can handle to keep down costs.  They have to ensure the low cost labor is done correctly and that absolutely is chargeable.  It also protects them from owners who do bad renovations from being a gc to finish the last part of the reno.  

    This is usually not an issue for properly maintained homes minus the occasional capex when again they earn the 10%.

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