Should/Can I hire a property management company before closing?
Rental Property Investor · Member since 2022 · 24 posts · 6 votes
Should/Can I hire a property management company before closing?
Most Popular Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes@Demetrius Potts sounds like you're dealing with big PM Companies that have outsourced staff that is clueless.
Like @Nathan Gesner, we do this all the time. We sign a management contract AFTER inspection passes and mortgage approval, so we can takeover on day 1.
You may want to read below on how to find a better PMC.
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.
We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
Logical Property Management4.9459 Reviews
6 Replies
- 4yMelanie ThomasBusiness MemberReal Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 489 votes
Hi Demetrius! Congrats on your first investment. Speaking as a PM company you need to have a property so that it can be written into the contract. Once you have selected a PM company have the agreement ready to go and sign. We have accepted contracts from owners in escrow in the past and each time the deal falls through and often never comes to fruition so the contract had to be amended. Once the address is identified the PM company can help run rental comps for you etc. The right PM will work with you to make it a seamless transition. You can close, sign a PMA and have the home on the market for rent same day. Check out NARPM website to find excellent PM's in your area. Happy investing!
RentWerx Property Management4.73304 Reviews - Rental Property Investor · Member since 2022 · 24 posts · 6 votes4y
Thanks for the quick response. My current agent is taking almost 12-24 hrs to respond but that’s another issue.
Will they be the ones to pick up the keys at closing? - 4yMelanie ThomasBusiness MemberReal Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 489 votes
Quote from @Demetrius Potts:
Thanks for the quick response. My current agent is taking almost 12-24 hrs to respond but that’s another issue.
Will they be the ones to pick up the keys at closing?You can certainly arrange that! I am sure the PM company would be happy to do that for you. I know we are! 12-24 hours is a big NO NO! My staff has 2 hours to reply to ANY inquiry. Congrats again!
RentWerx Property Management4.73304 Reviews - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes4y
Quote from @Demetrius Potts:
I'm not sure why this is difficult for them to understand. I do it all the time. The owner calls, tells me they are under contract to purchase a property and they want me to manage it. We complete all the paperwork and I can usually go view the home before closing. On the day of closing, I get the keys and start marketing the property.
The DIY Landlord Book4.7248 Reviews - 4yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Demetrius Potts sounds like you're dealing with big PM Companies that have outsourced staff that is clueless.
Like @Nathan Gesner, we do this all the time. We sign a management contract AFTER inspection passes and mortgage approval, so we can takeover on day 1.
You may want to read below on how to find a better PMC.
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.
We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
Logical Property Management4.9459 Reviews - Rental Property Investor · Member since 2022 · 24 posts · 6 votes4y
Quote from @Drew Sygit:
@Demetrius Potts sounds like you're dealing with big PM Companies that have outsourced staff that is clueless.
Like @Nathan Gesner, we do this all the time. We sign a management contract AFTER inspection passes and mortgage approval, so we can takeover on day 1.
You may want to read below on how to find a better PMC.
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.
We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
NICE! The good news is I have been asking about the fees which they say range between 8-10 percent, with marketing subtracted from first months rent. Bad news is though I read "Tenant Screening" I completely ASSUMED what I imagined it to be in my head so that's a good call.
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