Rental Property Investor · Orlando, FL · Member since 2016 · 463 posts · 220 votes
I bought a quadplex in a city a couple of hours away and hired a property management company. There was one vacancy when I closed on Dec. 1st. I wanted some repairs and updates done before it was rented (update electrical panel, change out a couple of outlets, some cosmetic updates). A week after closing, I walked the property with the maintenance manager, who was supposed to get back to me within a week with an estimate. My plan was to have the unit ready to rent by Jan. 1st.
They did not submit their estimate until a week ago (i.e. 6 weeks after I closed, and 4 weeks after they were supposed to e-mail it to me). The estimate was for slightly over $4,000- for a one-bedroom apartment that will rent for $500!
At this point, I am beyond annoyed with them, and I want to switch to another property manager with a greater sense of urgency. Oh, and did I mention that I am paying them close to 15% of gross rents?!
Anyhow- I am wondering if it is too soon to switch PM, and if the change will look bad to tenants (second change within two months). What do you think?
Property Manager · Cumming, GA · Member since 2015 · 261 posts · 199 votes
9y
Closing on a property in December when the world goes on vacation may have something to do with the delay.
Also, if you close on a property in Georgia the first week of deer season, put extra time in your spreadsheet to get contractors out to your property:)
Time to switch! If they are a month late from the get go it will likely just get worse. And 15% is generally high unless they are performing extra services.
Investor · Wilmington, NC · Member since 2016 · 211 posts · 262 votes
9y
Get a new PM. How much will it cost you to break your contract with the current PM? Tell them you're getting a second bid on the work and when it's significantly lower let them know.
It actually won't cost me anything (well... except lost rent), as they are apparently so confident in the quality of their service that they offer a "Love us or leave us" policy, which is that you can cancel at any time during the contract with a 60-day notice of intent to cancel. Guess I'll be sending that notice tomorrow!
I am livid because they seemed so on top of things before I signed with them. Great at follow-up, communication, and general customer service. Then, as soon as I handed over the keys, they started slacking off... I have read so often here on BP that your property management can make or break your investment, and I don't intend to let this company turn a great investment into a money-loser!
Completely agree! That's what I am thinking too. If they can't get a repair estimate in within a reasonable time period, who knows what else will happen! I want to cut my losses early by switching PM.
RE: Fees- They charge a flat $75 fee per door- which may be great for those who are pulling in $1,000+ from their rental, but for my $500-a-month one-bedroom apartments, that's 15%! My fault for not looking more closely into what the flat fee translated into as a percentage.
Investor · Wilmington, NC · Member since 2016 · 211 posts · 262 votes
9y
I initially had started to type earlier about how you should voice your complaints with them and see how they respond, but my gut (and I think yours) is saying find somebody else. That's great that you can get out without much of a loss, I say cut your ties while you can.
Residential Real Estate Broker · Cartersville, GA · Member since 2015 · 575 posts · 581 votes
9y
@Account Closed so you didn't mention what you did during those 4 weeks of inactivity? You pick up the phone and call them and find out what was going on? The $4,000 estimate was for exactly what you asked for or did it include a different scope of work?
Investor · Arlington, VA · Member since 2016 · 80 posts · 39 votes
9y
Just because agreement says 60 days notice, doesn't mean you HAVE to abide by it. I was in a very similar situation recently when the PM let the property sit for three weeks and repeatedly promised to send me a list of repairs needed, but didn't. When I contacted the PM to read off a list of non-performance on their part, I simply said I was getting a new PM. They couldn't argue with my logic, and at the end of the day they didn't want me to slam them in online reviews, so we parted ways amicably. I had another PM of mine pick the keys up that day. Don't let someone sabotage your business! You should hold your team to a high standard.
Property Manager · Cumming, GA · Member since 2015 · 261 posts · 199 votes
9y
Closing on a property in December when the world goes on vacation may have something to do with the delay.
Also, if you close on a property in Georgia the first week of deer season, put extra time in your spreadsheet to get contractors out to your property:)
License Sales Agent · Loveland, OH · Member since 2016 · 6 posts · 3 votes
9y
I have experienced a huge delay getting work performed (Here in Ohio) because of permit requirements on electrical. Always be sure to have work (especially trades) with licensed contractors. The worst thing is to be held responsible for improper installations. It is the responsibility of the owner to ensure any permits are followed through with. If plans/drawings are required, it could take a month just to get the official scope of work complete.
Delays should be communicated by the PM in any regard.
We (I'm a property manager) typically have weekly communications for status. Was communication specified in the management agreement?
Rental Property Investor · Orlando, FL · Member since 2016 · 463 posts · 220 votes
9y
Thank you all for your feedback!
@William Walker You are right. I weighed contacting the head broker and letting him know that I am less than happy with the service I have obtained so far.... But I have lost trust in the company and, as you say, my gut is telling me that we are not a good fit for one another.
@Mike Dymski $ @Robert Gilstrap- I followed up once a week to find out where they were at and when I could expect the estimate. I also communicated with the PM about other things (filling the vacancy, another tenant's security deposit, and other matters). Frankly, I don't think I should be hand-holding or micromanaging. THEY are supposed to be the professionals at this, right? Personally, I prefer to work with people who are professional enough that, once we have discussed what is to be done, how and when, they are autonomous enough to do it without my having to follow up constantly, and courteous enough that, if there is a delay, they let me know that they cannot meet the original deadline and provide another delivery date. Are these unreasonable expectations?
@Mike Warder- Thanks for sharing your experience! If I'm lucky maybe they'll let me go immediately too. I completely agree that I should (and do) hold my team to high standards- and that includes their doing their work as and when they say they will, without my having to hound them!
Rental Property Investor · Orlando, FL · Member since 2016 · 463 posts · 220 votes
9y
@Phil Earley- Yes, I know that lots of things slow down around the holidays..... But I closed on Dec. 1st!! And THEY were the ones who told me to expect the estimate within a week.
I know all about contractors taking time off for their priorities... My electrician flat out told me he couldn't start working on my project because he was going hunting the week of Thanksgiving and the first week of December. My cabinet and flooring guy at the same house was supposed to have most of the work done in December, but took off to Arizona for Christmas and didn't even get started until January!
I have learned to add one month to any timeline any contractor gives me... But I would think a professional property manager should be different.
Delays should be communicated by the PM in any regard.
We (I'm a property manager) typically have weekly communications for status. Was communication specified in the management agreement?
I agree that work should be permitted and performed by licensed tradespeople. This was really just an initial estimate of what work needed to be done to get one unit market-ready and how much it would cost. Now add in the time to get any permits.... This unit could be vacant for four months!
I am letting the broker know exactly why I am switching from his company. There is nothing in the PM contact about communication or specifically about timeliness of communication/work to be done.
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
9y
Unfortunately, once a week is not enough. I'd recommend every day once the deadline passes. You are going to run into a lot of frustration with real estate investing if you expect PMs, contractors and residents to do as they say. Sorry for the tough love. I learned it the hard way as well. Good luck with your search.
Real Estate Investor · Alexandria, VA · Member since 2016 · 33 posts · 5 votes
9y
@Account Closed, I, too, am a Cleveland investor and finding the right PM fit has not been easy. I would like to share more of our experience and learn how yours was resolved. Thank you for posting this, Patsy. I'll send you a private message.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
9y
Both sides share some blame. They were late to act. You were late to "react". PM manages the tenant. Owner manages the PM. If either fails, results can be disastrous.
@Account Closed, I, too, am a Cleveland investor and finding the right PM fit has not been easy. I would like to share more of our experience and learn how yours was resolved. Thank you for posting this, Patsy. I'll send you a private message.
Real Estate Agent · Tucson, AZ · Member since 2016 · 168 posts · 106 votes
9y
I think it's all been said, but when I read the title of your post, I was thinking it could also be named, "How late is too late to fire your property manager?".
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
9y
Here's kind of the flip side of your request. Just something to think about.....not saying you are right or wrong or your property manager is right or wrong....just flip side of the request. So read with an open mind... In some sense you're asking them to be your general contractor, not a property manager...and in some sense you're asking them to do this work for free. I'm thinking you haven't paid them anything for the vacant unit, but asking them do do work. To me I'm thinking this is not make ready work or get it rent ready work....replacing the panel is renovation work. Maybe you've contracted for that....I don't know. Maybe they have called and called and called the contractor to come out....maybe it took 2-3 weeks for the contractor to come out and give you a FREE estimate you don't like. Maybe they have been out 2-3 times to meet contractors who did not show up..again for FREE. You might be lucky they're not charging you trip charges.
At first I thought....around here it is pretty standard to charge 10% property management fee and 1 month's rent to get it leased....so $75/door is 15%...but then I'm thinking $50/month to take all the calls, collect rent, pay for software, pay for licenses, pay taxes, pay for bank accounts, checks, and everything else they pay for...with high expectations from the owners....that's not much take home for the headaches...so now I know why they charge a minimum of $75/door....and that's probably not enough.
Maybe you can change property mangers, but I don't know that you get satisfaction from the next one either. I've never met raving fans of property managers. If anything no one seems to like their property manager. I think that is just part of the business.
I'm thinking if you want things like panel changeout.....call the contractors yourself....line them up at 10-11-12 and meet them out there yourself....get the bids and choose one. Don't depend on your property manager to do stuff like this for you. Let them do the simple stuff, paint, carpet, rekey. Anything more than that, do yourself. I'd also say I've never met anyone who is happy with the repair costs the property manager charges for repairs. That's just part of the game. You can replace toilet flappers for a $3 part and 10 minutes of time, but you have the property manager do it, it's $75-$100, but that's the tradeoff. You don't have to drive an hour away or take the call at 8pm or deal with whatever inconvenience it causes.
With all due respect, I am not sure why you think I should be paying them anything for the vacant unit... They take a month's rent when they lease it.
And they are certainly not doing the rent-ready work for free. They provide an estimate, I say yay or nay, they do the work (or get it done through a contractor- certainly for the electrical work) and I pay them or the contractor. I know higher prices come along with the convenience of their handling it from start to finish.
As I mentioned in my original post, this property is a few hours from where I live, hence why I hired a property manager. It is pretty standard, I believe, for property managers to handle getting a unit ready to rent, including looking for contractors and meeting them there to get the work done. I should not have to look for competing bids on work to be done and then meet the workers.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
9y
@Account Closed What I meant was they are not collecting any fee from you now for the work they are doing? They're not collecting a fee on a vacant unit or do you have a clause like this:
Service Fees: Each time Broker arranges for the Property to be repaired, maintained, redecorated, or
altered as permitted by this agreement, Owner will pay Broker a service fee equal to: (Check one box
only.)
(1) % of the total cost of each repair, maintenance, alteration, or redecoration.
(2)The service fees under this Paragraph 12E are earned at the time the repair, maintenance, redecoration, or alteration is made and are payable upon Owner's receipt of Broker's invoice
If they are making money off the repair or each time they are meeting someone there to give estimates, then yes I would expect them to work harder and faster. If they don't have a clause like that and they're doing that work for free, then you're getting more than you paid for.
I personally think if you want them to do all this work as part of the leasing fee, you're expectations are too high, but that is where we may differ. You just have to refer back to property management agreement to see what it says.
There is no such clause in my contract.... Wow, do some people really pay their PM just to go out for a service repair?!
What I meant was they are not collecting any fee from you now for the work they are doing?
They are getting paid for the work they do themselves, i.e. touch up paint, replace locks, etc. I am sure I pay a premium for these services, too! As you mentioned, that's the price of the convenience of having them handle these things! And I am okay with that. My specific complaint was that something that was supposed to be done right away waited 4 months to be completed (and that includes work that they were supposed to do themselves as well as work contracted out).