Houston PM Experiences - Recommendations

[Lisa T.]

We've been with our PM for 5 years and we're seeing a decline in their services so I think it's past time to get out in the market and see what our options are for a new PM. Do you have a solid PM in the Houston area you could name? I, of course, would need to do my own due diligence but it's nice to have somewhere to start my research.

Examples:
I'm finding their recommended rental rates to be very low when I go out and search online, rentometer, Zillow, etc. We can't afford to not be pricing right with the significant double-digit increases in insurance and property taxes, especially in Houston.

Decentralized Service -- I realize this is done to be more efficient/cost effective but it's more than quadrupled the time it requires me to "manage" them/PM.  Lots of staff turnover, I go over something on one property and 2 months later have to revisit the same issue on an exact property sometimes because different people have been assigned, sometimes because the person is brand new.  (We built the same plan within 2-3 blocks of each other so often we address similar issues that come up.)

They now charge a $200 non-refundable application fee.  This seems very high to me. I have noticed since my PM implemented this our days on market have significantly increased. Coincidence? What is the typical application fee in the Houston area? The best I could do is look at individual listings to the general public and $200 is high. In the other markets we are in it's in the $75-125 range. 

Thanks in advance for taking the time to comment/make suggestions.  (I did post the $200 application fee on a different forum here today.  Probably shouldn't conflate the topics but wanted to make sure I had the right audience, apologize if this is a re-read for some.)

[Michael Smythe]

We’re a Property Management Company (PMC) in Metro Detroit ONLY, with 25+ years of experience, and we’ve seen owners make the same mistakes, over & over again when looking to hire a PMC – which drives us nuts!.

In our experience, the #1 mistake owners make is ASSUMING all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY.

So, owners mistakenly think price is the only differentiator – and look for a PMC like they’d shop for groceries☹

We encourage you to learn from the mistakes of others by reading posts here on BiggerPockets from owners that picked a PMC solely by price and regretted it.

We recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Even if someone gives you a referral, do NOT make the mistake of assuming that just because a PMC met their expectations, they’ll meet your expectations. We all have our own expectations and what works for someone else, may not work for you.

If you’re new to all of this, it's often a case of not doing enough research, as you don't know what you don't know!

So, ask more questions!

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!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

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😊

Here’s some articles we’ve contributed to BiggerPockets about screening a PMC BETTER than you would a tenant!

20 Questions to Ask When Vetting a Property Management Company: Processes

13 Questions to Ask to a PMC: Communication and Documentation

24 Questions to Ask When Evaluating a Property Management Contract