What are things you wish you could improve about prop. managment

Las Vegas , NV · Member since 2017 · 11 posts · 1 vote

Coming into real estate investing something I learned from the start is how much people dislike property management companies. A common complaint I hear is how they feel like there property is treated as just a number or they didn't properly screen tenants and/or monitor the property and now they have to repair a trashed rental squeezing all the profits they hoped to gain.

My question to the BP world is what is something a property management company could do to make you sleep easy with bringing your properties to them to manage. What do you dislike about your PM company? If you were in charge, what would you change? What do you wish your PM did that they just don't do? Simply, How can PM companies be better?

Also, what do you love about your PM company?

0 Reply

58 views

Most Popular Reply

Steve Vaughan

Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes

Originally posted by @Nicholas Judd:

@Steve Vaughan Can you elaborate a little more as far as spreading those fees out over the tenancy. Are you talking about placement fees, start up fees, etc. ?

As far as repair requests, would you be willing to pay a higher monthly premium if it meant there was no repair up charge?

When you say to triage repair requests, how might one do that?

The vacancy-fill fee. Spread it out. If I pay you one month's rent to fill a vacancy, stand behind your tenant choice and spread it over the tenancy or at least 6 months.

By triage repair requests - I mean to ask a clarifying question or 2. If a tenant calls and says 'my sink (stove, fridge, a/c) is broke', ask questions. How is it broke? Tons of things can be rectified easily over the phone.

The repair up-charge is awesome. Not only do you make more when you immediately call tradesmen at $100/min, you have a negative incentive to save us money by asking simple questions. Hence my request to triage these. Woo-hoo! Guess I'll self-manage forever.

3 Reply

See this reply in the discussion

33 Replies

Jump to latestLatest

Sort by

Ray Harrell
Investor · Chicago, IL · Member since 2016 · 1k+ posts · 930 votes
9y
Communication! Stop eating up all the profits in repairs!
1 Reply
Nicholas Judd
OP
Las Vegas , NV · Member since 2017 · 11 posts · 1 vote
9y
@Ray Harrell how would you want the communication to be better??
What is a typical upcharge in repairs?
0 Reply
Ray Harrell
Investor · Chicago, IL · Member since 2016 · 1k+ posts · 930 votes
9y
Communication like telling me a tenant moved out, telling me when work is completed, providing photos. I just don't believe some of the charges for repairs, or even that some of these repairs are real!
0 Reply
Nicholas Judd
OP
Las Vegas , NV · Member since 2017 · 11 posts · 1 vote
9y
@Ray Harrell those are some serious issues!
Is there anything you like about your PM company?
Are they a large company with a huge portfolio or maybe something smaller scale?
0 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
9y
Spread lease-up fees throughout the tenancy. Stand behind your placement choice.
Triage repair requests so you don't send out the plumber or Maytag Man without reason. Ask a couple questions to figure out if it's just a breaker or loose trap.
Basically treat our property more like you would your own and I may hire a PM.
2 Reply
Nicholas Judd
OP
Las Vegas , NV · Member since 2017 · 11 posts · 1 vote
9y
@Steve Vaughan Can you elaborate a little more as far as spreading those fees out over the tenancy. Are you talking about placement fees, start up fees, etc. ?
As far as repair requests, would you be willing to pay a higher monthly premium if it meant there was no repair up charge?
When you say to triage repair requests, how might one do that?
0 Reply
David Faulkner
Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
9y
Originally posted by @Nicholas Judd:

@Ray Harrell how would you want the communication to be better??
What is a typical upcharge in repairs?
It is hard to say what is a typical upcharge for repairs since those markups typically happen under the table ... guess you would have to ask the PM or the contractor marking up the invoices, but doubt they are talking. In my estimation, PMs using their vendors usually charge double or triple the market rate for the repair, so that would be around 100% markup.
1 Reply
Jimmy MurrayBusiness Member
Investor · Warwick, RI · Member since 2013 · 220 posts · 119 votes
9y
I'm sorry to hear you guys have had such poor luck with property managers. In my business we mark up pricing by 10% on repairs for the management of diagnosing the repair through an onsite visit getting the vendor to the property to complete the repair. Doubling or tripling a repair cost is crazy to even think of. I agree with all the comments above about communication. Communication is key in any real estate relationship.
[email protected]401-829-1533
Lyon Property Group4.5635 Reviews
Website View Page
1 Reply
Kyle McCorkel
Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes
9y
Communication is an obvious one. Although, I feel that I've got some good PMs through careful vetting (and a little bit of luck, TBH). You also have to kind of lay out the expectation up front with them about what you want. Do you want to be contacted for every repair, or just repairs over a certain amount? How involved do you want to be with tenant placement? Etc If you are new then it can be difficult to even know what you want from your PM until you've experienced some "getting to know each other" pains. In a way I am a little understanding....think about if you were running a PM company....you kind of have two very different "customers": the tenants and the owners. Who would you focus on the most? Most PMs I would argue focus on the tenants...if you don't focus on getting good tenants and collecting rent, and keeping tenants happy, then you don't get paid anything....10% of rent on a vacant property is nothing! I like when a PM runs nearly everything by me. Gives me a chance to ask questions. However, I try to not be a bottleneck by responding very quickly. If you expect a fast response from them, then you better show the same behavior in return.
1 Reply
Nicholas Judd
OP
Las Vegas , NV · Member since 2017 · 11 posts · 1 vote
9y
@Jimmy Murray and @Kyle McCorkel
I appreciate the responses! Very good feedback! Kyle, you make a very good point about the focus being more on the tenants! "10% of rent on a vacant property is nothing". Great advice.
0 Reply
Max T.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
9y
No lease up fee following an eviction No lease up fee for replacing a tenant that stayed < 1 yr. Bonus for when tenants renew past year 2. Preventative, regularly scheduled maintenance. With photos and good communication.
1 Reply
David Faulkner
Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
9y
Originally posted by @Jimmy Murray:

I'm sorry to hear you guys have had such poor luck with property managers.
In my business we mark up pricing by 10% on repairs for the management of diagnosing the repair through an onsite visit getting the vendor to the property to complete the repair. Doubling or tripling a repair cost is crazy to even think of.
I agree with all the comments above about communication. Communication is key in any real estate relationship.
At least the 10% is "above the table" ... one thing I never really understood, though, is if the PM charges a markup for managing a repair (either above or under the table), then what does the separate monthly management fee cover? Collecting the rent via electronic auto deposit?
0 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
9y
Originally posted by @Nicholas Judd:

@Steve Vaughan Can you elaborate a little more as far as spreading those fees out over the tenancy. Are you talking about placement fees, start up fees, etc. ?
As far as repair requests, would you be willing to pay a higher monthly premium if it meant there was no repair up charge?
When you say to triage repair requests, how might one do that?
The vacancy-fill fee. Spread it out. If I pay you one month's rent to fill a vacancy, stand behind your tenant choice and spread it over the tenancy or at least 6 months.
By triage repair requests - I mean to ask a clarifying question or 2. If a tenant calls and says 'my sink (stove, fridge, a/c) is broke', ask questions. How is it broke? Tons of things can be rectified easily over the phone.
The repair up-charge is awesome. Not only do you make more when you immediately call tradesmen at $100/min, you have a negative incentive to save us money by asking simple questions. Hence my request to triage these. Woo-hoo! Guess I'll self-manage forever.
3 Reply
David Faulkner
Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
9y
Originally posted by @Steve Vaughan:

Originally posted by @Nicholas Judd:
@Steve Vaughan Can you elaborate a little more as far as spreading those fees out over the tenancy. Are you talking about placement fees, start up fees, etc. ?
By triage repair requests - I mean to ask a clarifying question or 2. If a tenant calls and says 'my sink (stove, fridge, a/c) is broke', ask questions. How is it broke? Tons of things can be rectified easily over the phone.
Reminds me of the old school IT help desks scripts: "OK, Sir, you say your computer is not booting up properly. Is it plugged in?" LOL!
1 Reply
Nicholas Judd
OP
Las Vegas , NV · Member since 2017 · 11 posts · 1 vote
9y
@David Faulkner lol I'm not IT or customer service. Just love getting feedback from the people who are out there investing and learning from there experiences. Appreciate the input.
0 Reply
David Grabiner
Investor · Chattanooga, TN · Member since 2016 · 146 posts · 108 votes
9y
I haven't used a PM company so I don't have any direct experience with them but I would use one If I could find one that was good and charged a fair fixed price. I have seen several properties run by PM's and they are more often then not a big mess. Tenants have trashed the place, repairs have not been done in years, and even the units are empty and the manager didn't even know it. Now some of this could be because the owners didn't want to put any money into repairs, so it might not all be the PM's fault but it doesn't give a good impression of the PM either.
My wish list would be:
1. Regular inspections, preventive maintenance, and scheduling of large repairs when needed. Basically keep the house in the same condition it was when It was handed over to them.
2. A set 10% fee. and that is it. No leasing fee, no repairs fee, no eviction fee (after all it is your fault you didn't screen the tenant properly), no marketing fee, no empty unit fee. etc. It should just be a 10% of gross rents collected and any actual costs such as repairs, lawyer fees, utilities etc should be recorded online with a picture of the bill to prove it.
It just bugs me that someone charges a percentage of rents and you have to pay them again anytime they do any work.
2 Reply
David Zheng
Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
9y
This is why I plan on creating my own management company (of course I'd need to own like 50+ properties but I think I can manage anything less than that on a fulltime basis). There's way too much conflict of interest in everything with a third party PM in my opinion and I hate just throwing 10% of rents at a PM who maybe has to deal with a call or two a month.
0 Reply
Robert GilstrapPro Member
Residential Real Estate Broker · Cartersville, GA · Member since 2015 · 575 posts · 581 votes
9y
@David Grabiner If you're wondering why you haven't seen a PM that only charges 10% and nothing else it's because it's not possible to stay in business at that rate. PM is a nickel dime business and if you aren't incredibly efficient you will be out of business quickly. The primary reason you see so many bad PM's is that they don't charge enough and then when it comes time to actually do work they aren't willing to work for free so they end up performing sub par.
PM isn't an all you can eat buffet. It's priced by the work they perform. You want us to lease out your property? Guess what agents get paid to do that.
Want us to handle maintenance and be on call and make sure you don't get screwed on repairs, hold tenants accountable for damage they cause, document with photos the work being performed, warranty and stand behind the vendor who was hired? That costs something.
You want a rent increase every year and a new lease signed and keep those tenants happy and paying? That costs money. I think you get the idea.
@David Zheng would you work for an entire month taking phone calls 24/7, handling accounting, preparing statements, visiting properties, marketing, showing, handling repair requests, negotiating with vendors, paying those vendors, verifying the work they did, taking pictures of work, chasing tenants who don't pay, etc. for $100? I doubt it. Before you assume the other guy doesn't do anything you need to get educated on what they actually do in fact do.
[email protected]770-480-7301
1 Reply
David Zheng
Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
9y
@Robert Gilstrap

I have over 50 tenants right now and already do all of that on top of my full-time :)
0 Reply
David Zheng
Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
9y
@Robert Gilstrap and is it only $100? From what I've seen its 10% of rent and I do have a couple properties that rent for over 4k/month.

Please don't assume as well
0 Reply
Deanna McCormick
Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
9y
@David Zheng in creating your own management company you'd be managing people,,,and would have issues, similar to hiring a PM company, it's just that you'd be paying salaries instead of commission.
What depends on what you plan to do is dependent on location of properties, number of units. What you plan for is how minimize costs and keep the tenant customer happy, and your property in good repair.
0 Reply
David Zheng
Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
9y
@Deanna McCormick

I totally agree there is a difference. the reason my idea works is because all my properties are in a single area and most of the setup is the same so problems can be fixed by some kind of standard procedure. With a 3rd party they manage so many things, my easy to deal with issues could get blown up.

However, hiring my own people, I can train them myself as close to my image as possible. think about it like the wolf of wall street. he trains his salespeople to act like him and in essence they all do as well as he does.

doing the math on it...if I can get 150 tenants making 250 profit off each/month
Have a full time handyman and office assistant at a combined 90k/year, I'd rather go the employee route
0 Reply
David Grabiner
Investor · Chattanooga, TN · Member since 2016 · 146 posts · 108 votes
9y
@Robert Gilstrap
Ok so then charge 12% or whatever it is that you need to do your job correctly. My thought is that the PM should only be making money when I make money, they shouldn't just charge extra for everything that requires work.
0 Reply
Robert GilstrapPro Member
Residential Real Estate Broker · Cartersville, GA · Member since 2015 · 575 posts · 581 votes
9y
@David Grabiner how generous of you. Lets see; an extra 2% of $1,000 (just using an example) is $20 bucks. Would you be able to do a fraction of what I described for $20? If you think the PM should only make money when you make money then what happens when you lose money due to you making a poor buying decision? Should he lose as well? Should he lose when the HVAC wears out? Does the PM get to share in the property appreciation, tax incentives? Of course not. Real estate is an investment. You bought it so you get to live with the consequences of what you bought. You can always do it all yourself and pretend you are saving money. Savvy investors realize the power of leverage not only in money but in time and skill set.
[email protected]770-480-7301
1 Reply
David Grabiner
Investor · Chattanooga, TN · Member since 2016 · 146 posts · 108 votes
9y
When I said making money I ment getting income I didn't mean making a profit. So the PM should only be getting income If I'm getting income as their primary job is to make sure I get income out of my property. Whether I make any profit will depend if I invested wisely. Lets take your example of $1000 per month, at 12% that works out to $1440 per year. Marketing a property once a year, 1 hr of work. Showing property 5 hrs of work. Signing lease 1 hr of work. one call a month from tenant 12 hr of work including work inspection of completed repairs if needed. Quarterly inspections 3hrs of work. Book keeping for one unit 12hrs. For a total of 34hrs of work just for that one unit. So that works out to $42 per hour. Yes, I think paying someone paying $42 to complete those tasks is quite generous. Now hours worked will be higher on some units and much lower on others but I think this is a fair break down for hours worked on one unit if someone is a professional and has systems in place to manage multiple properties.
@Robert Gilstrap
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.