First off, thanks for reading this and any help you can give would be appreciated.
I own 6 units in 2 houses and going through my share of headaches with a property management company (I know this is, unfortunately, too common).
Mainly the issues with the PM company are their lack of responsiveness to both me and the tenants, issues with deposits being made on time (moving to electronic soon) and a host of other issues where they don't even visit the properties once in a while to make sure things are ok. I've had neighbors email me about lingering issues when they haven't been resolved in weeks...
Both houses are easy to manage. I used to do it myself, for years, and maybe get a call or two every month. With a job change, I'm just not in state enough (or even in the same time zone as I travel internationally too) to handle it myself. With the property manager, I like having the buffer between the tenants and myself, so I can have someone act as a mediator if there's an issue.
The problem? They just aren't handling what they should and I'm hard pressed to continue to spend the money on a manager when they aren't doing what they should and there's probably a better way to handle things that I may realize. Suggestions?
I was thinking of hiring a handyman and have him be on-call for the minor things and any larger projects could be handled by the contractors I hire. When vacancies come around, I might ask them to show the apartment for a fee, or just use a realtor to handle that if need be.
As the PM company is moving towards handling payments electronically, which I can handle with or without them, I'm just trying to figure out a way to get my sanity back without dealing with this non-sense and maybe coming away spending a bit less but getting better responses.
Unfortunately, I've called around and there aren't many PM's locally (CT) that I can find willing to manage two 3-families (most want business accounts, etc.).
Just wondering if anyone can think of any arrangements that might work that would give me the buffer between the tenants and myself and maybe make things run smoother without a PM?
I tried to keep things as brief as possible as I know everyone is busy -- if you need further details, let me know and I'll gladly expand.
Thanks in advance for any suggestions - I truly appreciate it!
As an investor myself and owner of a PM company I can understand the frustration you are experiencing. That is basically why I created my own company. I think it boils down to one maybe 2 things.. first is having the same goals as your PM company and making sure that your business models are aligned with eachother and also setting the right expectations of what you expect of them and what can expect of you. Many times people hire a company jsut so that they dont want to deal with the problems of owning a property. The reality is those problems do not go away, giving it to someone that is not aligned with your model will only make it worse. Its like closing the door to a fire and expecting for it to go out on its own and when you re-check the problem is worse. Part of those expectations I feel should be on what level of communication you should and your tenants should expect... I think that just because they happen to manage homes and you have a home and you all agree on a monthly fee. That does not mean you guys should get married.
First thing I would do is divorce that company and fire them... Then I would look on NARPM.ORG and find reputable companies that share your vision and business model. I think you saying that no one will work with your situation is basically you are saying "No" right out of the gate and you will NOT find anyone when you say or think that. Its not like you have a wild animal farm, you have different business model and yes there are companies that are out there to fit yours.
When you interview the companies make sure you guys align by asking many questions.. below are some I would recommend you ask... MAYBE NOT ALL ... But I think if you ask a few you will get a good idea
Also look them up online for reviews. Google, Yelp, BBB. If they do not have any that should be a red flag.
- Questions to Ask prospective management companies:
1.How many properties do the owners actually own themselves?
2.What do you do to ensure that the tenant is responsible for security deposit disputes since that is the largest reason for landlord lawsuits?
3.How familiar are you with the newly changed laws that can affect you the owner if they are not used correctly?
4.How are your maintenance emergency calls handled?
5.Do you surcharge on your maintenance?
6.Can I use my own handyman?
7.How long have you been in business?
8.How many employees do you have?
9.How many property managers do you have?
a.~ How many properties does each manager have?
b.~ Are your property managers licensed?
c.~ What kind of training and qualifications do they have?
d.~ Are they knowledgeable of all current laws?
e.~ How do you protect me from being sued?
f.~ What is the average rent of the properties you manage?
10.If I call and want to speak to a higher up, will I be able to? And who is that?
11.What is your leasing process?
a.~Days on Market?
b.~ Approval Qualifications?
c.~ What happens if my property hasn’t leased in 60 days?
12.Where do you advertise my property?
13.Is the tenant responsible for maintenance?
14.What happens if the tenant breaks the lease?
15.If I am not happy with your services can I get out of the contract?
16.What is your tenant retention rate?
17.Am I allowed to walk the property?
18.Do you inspect the property when it is vacant and occupied?
19.Do I have to allow pets?
20.Is the tenant required to have insurance?
21.If the tenant is in violation of their lease how is this handled?
22.What about evictions? Cost? Time?
23.Do you discount my management fee if I have more than one property?
24.Do I need to have the utilities turned on or do you handle that?
25.Do you pay utility bills?
26.Do you pay the owners taxes, insurance, mortgage?
27.Are there any other fees that I will encounter that we haven’t discussed?
28.What are your average days on market for vacant homes?
29.What is your average rent amount for all properties managed?
30.What is your average work order cost for the owner?
31.What is your average make-ready cost for the owner?
32.Are all my invoices uploaded to my owner portal?
33.How do you advertise your vacant units?
34.Do I receive video of my pre and post make ready?
35.Do you have a setup fee? Or a start up fee?
36.Do you upcharge on maintenance?
37.When do you make owner payments? How often?
38.Are you a Certified Property Manager?
39.Are you a member of NARPM?
40.What is your Guarantee?
41.Do you provide move in and move out reports?
42.How many pictures do you take of the property prior to tenant moves in and after the tenant moves out?
43.Do you get weekly reports when the property is vacant what prospective tenants are saying about your home?
44.Do you provide monthly newsletters to your tenants?
45.Do you hold investor education classes to help me become a better investor?
46.Do you have boutique-style, single point portfolio based management services?
Thanks for the excellent reply. You are correct in what you say - my existing PM's way of handling things isn't suiting my needs. Unfortunately, I have put ads on various local sites and word of mouth in attempt at finding someone, with no luck.
A block watch association that I belong to recommended the company I'm currently with and even a PM that I had for a short time. I had hoped he would work out but soon after taking my contract, he had some personal issues which prevented him from continuing the management, so we had to part ways.
The ironic thing was when I met with the current PM company, I asked many of the questions you quoted (and thank you for that list! It's awesome!) and was (likely) told what I wanted to hear rather than what was happening in practice. Since they were also a referral from the block watch, I had hoped they would work out. They've been in place for over a year, but the only thing I've seen is money going out in fees and me having to repeatedly request things or mediate between the contractors and them when they have been unresponsive. Hasn't been ideal.
I thought I did my due diligence with explaining what I expected in return for their management fees and they've had a huge turnover in their own agency from people leaving. One of their employees who was asked to step in and help with getting my account back in order, sent me an email saying she was leaving due to the dysfunction in the office and lack of follow-ups and responsibility. She hit the nail on the head. I had thought about sending her an email separately and asking if she would want to act as the property manager now that she's left the company, and was the only one who really did step in to help.
I'll check out the website you provided - many thanks - and hope that there are some PM's that can help locally.
I know you are much much larger of a company than me, but have you had any luck with any of the DIY management sites that assist with PM issues? I'm sure you use a much more robust platform, but was just trying to think outside the box and make things as least complicated as I possibly could (cozy.co is one that caught my eye). Seems to have a lot of features and might be ideal for a smaller need like mine.
Again, thanks for taking the time to reply and offer your guidance and suggestions - I truly appreciate it.
@Steve Rozenberg "first is having the same goals as your PM company and making sure that your business models are aligned with eachother and also setting the right expectations of what you expect of them and what can expect of you. Many times people hire a company jsut so that they dont want to deal with the problems of owning a property. The reality is those problems do not go away, giving it to someone that is not aligned with your model will only make it worse. Its like closing the door to a fire and expecting for it to go out on its own and when you re-check the problem is worse."
Absolutely awesome way to phrase it!!! This will definitely be in my notes for the future along with the questions. I have started compiling all the information I have acquired from BP and its members and am creating standardized forms for whatever situation I can possibly think of. I guess this is the strategy of franchising your business or turn key like I read in the E Myth.
Just wanted to say great knowledge and insight so thank you!