WHAT TO DO: Constant Evictions, High Maintenance Costs, Poor MGMT
To say the least, we're overwhelmed. My mom has owned her rental property for the last 12 years located 2 hours out of state. She's been an absentee landlord for the duration, and we continue to encounter problems with our property management. Some of the issues are: rent rates are way below market, poor tenant screening, frequent evictions, excessive damage and repair costs. Our property management contracts work out to his father's company, who specializes in repairs. He charges $45/hr for labor. We receive constant invoices for poor quality work at high prices. This property is on a shared lot with a 5-Bdrm, 3-Bath, 2000sq foot rental home. Behind the home is the 6-unit apartment complex.
Within the apartments, we get approx 3-4 evictions a year. Each apt unit is 600sq feet, 2bdr with month/month rental agreements. They rent for $495-695/mo. for unclear reasons. Reno NV rental comps are about $650 for a 1bdr, and $750+ for 2bdr. Turnover costs per unit go as follows: Painting $550, Patch/Repair $1100, Materials $500, Cleaning $130. The eviction process typically exceeds it's rental income for the month. $600 for the most recent: for locksmith, rekey, lockout, multiple eviction notices etc. The grand total repair/eviction costs for a single unit totals over $3000. This last particular tenant lived there only 5 months. Among all the disrepair, trash litters the property due to management neglect. We've recently noticed all of this in the last few months during our frequent visits to the property. We currently have 2 vacant units, and we're using this time to determine where we go from here. At this time, Reno NV is only experiencing a 1% vacancy rate. Considering our property's prime location, we are attempting to reconfigure the quality of tenant and price of rent. We are considering upgrading everything from exterior paint and light fixtures, to interior floors and faucets.
All that said, we're optimistic with this upcoming downtown area. The lot is walking distance from new cute breweries, restaurants, shopping, coffee shops, entertainment, etc. We'd hate to have seen this little gem fall into disarray.
Bottom line, we're ditching our property management company. Our feelings are mixed; we feel this could be a great opportunity, but this could also be a sinking ship. What lengths should we go regarding renovating to rent vs renovating to sell? What should we be renovating? What is recommended for calculating rental finances and expenses? How much should we invest before we abandon ship? How do we prevent hiring another terrible property management company? How do we determine rental agreements? How do we know our invoices are accurate and honest? We want to crunch all of these numbers, but we don't know who or where to acquire them from. Any input is very much appreciated!