Property Management Issue

General Landlording & Rental Properties
2yFollow

Property Management Issue

Nancy E.
Rental Property Investor · Charlotte, NC · Member since 2015 · 128 posts · 29 votes

We have been using the same PM for 8 years and have been happy for the most part. However, the latest turn required extensive maintenance and upgrades. We kept the security deposit but it was about 1/8th of the total bill. Some of the repairs we authorized but some were done without our consent - we were just billed. From our calculations, in 2024  we will lose 1/2 our income on this single-family property in Florida.

Any suggestions on our response to the PM? We would prefer not to fire them. The damage by the outgoing tenant was not that extensive to warrant all the upgrades. Our PM has previously said they must have properties they manage up to a certain ‘standard’.

We do not want to pay legal fees for Small Claims Court.

Any help is appreciated.

Stephen E

2Reply
68 views

Most Popular Reply

Sean O'KeefePro Member
CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 871 votes
2y

@Nancy E. interesting, thanks for sharing. 

  • Good news, you may be able to take accelerated bonus depreciation / expenses repairs immediately and get a tax advantage from this
  • Bad news, you still need to deal with this issue from tenant/PM.

If you are looking for unbiased feedback on PMs we get a lot from our customers and would be happy to pass it along if we have intel in your area. 

[email protected]628-241-0888
2Reply
See this reply in the discussion

7 Replies

Jump to latestLatest
  • Andy Nathan
    Rental Property Investor · Chicago, IL · Member since 2019 · 203 posts · 119 votes
    2y

    Few questions.


    First, will the rehab help you rent the property to better tenants at a higher rate? In other words, are the upgrades an expense or investment?

    Second, can you flip the property now and get a better return on your investment to flip to another property? 

    Third, if you self managed would you make these changes? If not, why?

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    2y

    @Nancy E. what pecentage of the spent funds were authorized and the percent that wasn't approved?

    You'll need to really read your management contract to figure out what your PMC can and cannot do regarding RentReady repairs. 

    Also, how long was this tenant in the property? At some point, either after a 3-5 year single tenant stay or after x number of tenants, you do have to spend a decent amount of funds to keep a property looking "fresh" enough to get +95% of market rent..

    [email protected]248-209-6824
    Logical Property Management4.9459 Reviews
    WebsiteView Page
    0Reply
  • David NilesBusiness Member
    Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
    2y

    Hi Stephen, you state "required extensive maintenance and upgrades" , required by who? Were these discussed between you and your PM? If so, maybe they mistook the conversation as authorization?  

    We never do any repairs or upgrades without crystal clear discussion and authorization from our owners.  I would recommend just contacting them and be as open as you were here and have a discussion on what transpired, why and where any confusion came in from either side. 

    0Reply
  • Adam BartomeoBusiness Member
    Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
    2y

    It sounds like you need to have a serious conversation with your PM about what was approved and what was not. Your PMA may explain what authority they may have in these types of situations. When it comes to safety or preventing further damage to the property, we will make decisions with or without the owner's permission as that is stated in the PMA. 

    [email protected]239-339-3969
    Bartomeo Property Management4.7150 Reviews
    WebsiteView Page
    0Reply
  • Sean O'KeefePro Member
    CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 871 votes
    2y

    @Nancy E. interesting, thanks for sharing. 

    • Good news, you may be able to take accelerated bonus depreciation / expenses repairs immediately and get a tax advantage from this
    • Bad news, you still need to deal with this issue from tenant/PM.

    If you are looking for unbiased feedback on PMs we get a lot from our customers and would be happy to pass it along if we have intel in your area. 

    [email protected]628-241-0888
    2Reply
  • Sean O'KeefePro Member
    CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 871 votes
    2y

    Another great post here from @Luca Giani I forgot to include in above post

    https://www.biggerpockets.com/forums/48/topics/1198241-seeki...

    [email protected]628-241-0888
    0Reply
  • Gabe R. Gonzalez
    Property Manager · Chicago · Member since 2021 · 61 posts · 32 votes
    2y

    @Nancy E. Stephen - if you have the scope, itemized invoices and pictures I’m happy to give you my thoughts on if the work was justified or not ( I’m not saying that them doing unauthorized work is okay) 

    I’m assuming deposit was more than $1k. 

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free