Looking for advice regarding some aspects of my property management company.
Is normal to be paid on the 15th of next month. They recently changing payment date. Like October rents are sent on 15th of November ? Sounds strange to me.
Is it normal to have turnover cost way above security deposit? What can be done better ? Tenant screening ? It is B properties.
Should I pay attention to Yelp reviews from tenants who deal with PM company I am using. They all terrible. Angry and desperate.
All advices appreciated.
I have a reporting solution that will help greatly for you to get the PM companies to be accountable to the owners. Let me know if you are interested.
1. 40-45 days to get paid is on the long end of "normal" for me. Typically, I've seen companies wait 7-35 days.
2. The turnover costs will depend on (a) how long the last tenant was in the property with little/no maintenance performed since previous vacancy, (b) pets allowed, (c) smoking allowed, (d) eviction with vandalism/theft. So, circumstances would dictate the costs... I do not know what can be done better without the context of what was done in this case... Did you ask the PM for an itemized list? Did the PM use the whole security deposit before charging you for the difference? I am assuming this is not a driving distance from you. I would also ask for photos of claimed damage.
3. Yelp reviews are more often left by unhappy tenants than by happy ones. It would depend on the specific allegations in the negative reviews for me. Repeating statements like, "I made a payment, but they claimed they never received it and charged me a late fee," would be a warning sign - for one, the company could be lying to stuff its pockets with late fees they get to keep for themselves; for two, if the unhappy tenant leaves, they get to charge you another lease-up fee; for three, this creates a civil/criminal liability situation... Statements like "the house smelled," or "my car was broken into in the driveway," or "it took them 3 days to get back to me when a burner on the stove stopped working" are not necessarily an indication of a bad PM... Negative statements from property owners/clients are also a warning sign.
Where is the property located?
@Patrick Jackson: I am interested.
You can negotiate your agreements before you sign them, i just switched property managers because the one i had started changed their agreement and wanted to start charging fees for everything, after negotiating with them and another PM i decided it was time to switch. one of the things the new PM wanted to do was pay the following month, i axed that and told the i would agree to the 17th of the month the rent is received. the only reason they want to keep it till the next month is so that they can collect interest on it.
As far as the turnover cost, it all depends on the damage done, i would recommend they send you records of everything, work orders, pictures and checklist with tenant signatures on it. My new PM wants to charge a fee if their is work to be done, i agreed to that but said i am not responsible for the fee, that it can come from the security deposit, but only after i am reimbursed for my expenses first, then whatever is left they can take their percentage from.
Yelp i do not pay too much attention too as @Al D. mentions.
@Patrick Jackson , i would be interested in your reporting solution, please send me a PM. like your first name BTW :)
The payment time frame is on the long end, but not out of the ordinary. If they are paying you on the same date and regularly, you should be fine. Turnover costs vary wildly, but you are right, tenant screening plays a bit role in that.
Online reviews are hit and miss- you are better off to ask your property manager for references from other owners rather than renters. Some renters will trash a place and leave a negative review because they didn't get their deposit back.
All of that said- there are way too many property managers that view their tenants with contempt and as a nuisance. I believe that finding great tenants at every level (A, B or C properties) is possible, but it's just as important to treat those tenants with respect and as customers. A bad property manager can turn a great tenant into a terrible one.
You might sit down with the property manager and review their screening process and acceptance criteria. If your philosophies are way off, ask if they can screen differently for your properties or you might need to find another property manager.
Dear fellows. Thank you very much for your advices. I will definitely try one more time to negotiate with my company. Despite many failures they mostly show their best effort to do things right. As it says devil you know is better than the devil you don't know.
Will keep you posted on my negotiations.
yelp review I'm mostly from the tenants. half of them are purely emotional but half of them are pretty factual and leaving me with the feeling that my p.m. company Can turn a good tenant into bed Tenant.
One good question I found here is why they are not using their own teams for turnovers even they are pretty big in the rehabbing.
And saying to me: we found this contractor, he can do job fast but expensive.
So thanks for all the insight.
@Patrick Jackson it is ridiculous to think the manager holds money for an extra month to earn interest. Assuming it's a $1,000 rental, holding the money for a month would not even earn $1. If he wanted to milk owners for extra money, there are more lucrative ways.
@Nikolay Voronovich there are many managers that hold your first month's check and then start paying you on the second month. This ensures the funds are always available to pay invoices and to pay you. It also ensures funds are on hand even if the tenant is late on rent because the PM has a full month to get that money before paying it out to you. However, there's no reason for them to hold it until the 15th of the second month. They should pay you on the first day of the month. Their fee should have been collected the month prior and any invoices due to be paid this month should come from this month's rent. Your money from the previous month should be ready to pay immediately. Unfortunately, it all depends on what you agreed to in the management agreement.
As for Yelp, or any other review site, what you will often see are the disgruntled tenants angry about not getting their way. In my experience, most reviews come from bad tenants and very few good tenants provide reviews. Read the reviews for facts instead of emotional complaints, then ask the manager if they can explain their side of things. For example, I have a really nasty review that is full of personal insults but lacks detail of what I apparently did wrong. If anyone asked, I can show them the tenant's pay ledger, their eviction and judgment from court, their failed attempt to sue me and file a stalking order against me, the condition of the home when they were kicked out, their 100-page complaint filed with the real estate board and that all complaints were dismissed, or the 50+ negative reviews they wrote all over the internet in a two-day period. When someone complaints, I can assure you they were bad tenants and I can prove my side of the story.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing