Kathleen, GA · Member since 2017 · 2 posts · 0 votes
Hi Guys,
Novice real estate investor living in Atlanta here; I recently acquired a small older 800sq ft 2 bedroom house in rural GA that I intend to rent out. The only problem is that I'm having a hard time finding a property manager in my area that is willing to take it on. It has been recently repaired and renovated, but it's located in a not so great part of town a block over from the local housing project. Going by the market for the neighborhood the most I command for rent is in the $600s. Most property managers seem to only want to deal with houses that can bring in $100 profit on their end. And I also have a hunch that they may be afraid to deal with my potential clientele.
Has anyone else been in the same situation? How did you resolve the issue? Did you bite the bullet and pay the higher property management fee?
Rental Property Investor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Justin Ross Lower rent SFH's in rougher areas can be a real challenge for a PM company. There isn't enough rent to charge a typical percentage based fee so it's usually a flat rate minimum, if you can even get them to take it on.
Money aside, these types of SFH's can just be tough to deal with as the low price tends to attract tons of inquiries from a bunch of prospects that are in no way qualified to pass even the most basic tenant screening process. Pretty much they hear from all the people they don't want to hear from.
Did the management companies you talked to tell you they'd at least do it if you paid the $100/mo minimum? Short of self managing you may not have many other options.
Rental Property Investor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Justin Ross Lower rent SFH's in rougher areas can be a real challenge for a PM company. There isn't enough rent to charge a typical percentage based fee so it's usually a flat rate minimum, if you can even get them to take it on.
Money aside, these types of SFH's can just be tough to deal with as the low price tends to attract tons of inquiries from a bunch of prospects that are in no way qualified to pass even the most basic tenant screening process. Pretty much they hear from all the people they don't want to hear from.
Did the management companies you talked to tell you they'd at least do it if you paid the $100/mo minimum? Short of self managing you may not have many other options.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
Justin Ross I don't know Atlanta so take this for what it's worth, it costs more to manage those rentals in war zone areas. I've had conversations with my PM where I invest and there are places she would love to manage, be okay managing, and only manage because I have 30+ units with her. I don't buy in those latter areas because I don't want to invest there. However, for her (the PM) you end up with a different cost structure because she won't go there alone, won't go there after sundown, will only send two staff members (not one) if there's an issue. Even though you're paying more there's a really good chance that your PM won't be *making* any additional profit. Bad areas also tend to come with late rents, evictions, etc. so those visits (that now cost twice as much because two people have to go) are far more frequent.
Granted, this isn't fair, it's overgeneralizing, it's casting a wide net over a tenant-class where the vast majority are great people, so your mileage may vary. However, when a PM (or any business) is turning down money they usually aren't doing it on a whim.
Investor · Fort Collins, CO · Member since 2017 · 169 posts · 119 votes
9y
Can you manage it yourself? Save the 10% of a traditional PM and make this turn a little profit for you. There are great tools out there to help you simply do everything that a PM offers. That would be my first thought anyway.