I am in the process of purchasing my first out of state property. I am considering hiring a property manager to manage the property for me. my question is can I hold them accountable same as i would a tenant? If rent isn't paid by the fifth then can i charge them a late fee? Would this not give them the incentive to have the rent collected on time? They should be charging it to the tenant anyway if they are late. What questions should I ask of the property management company? is there anything in particular that I should be watching out for? Thanks in advance for the tips!
@Neil Whitney - Interesting proposal! I like the general concept, but unfortunately have not heard of this type of solution. Property managers have fairly traditional fee structures.
However, some managers will agree to not collecting their percentage of rent if they cannot collect from the tenant. And, you can negotiate where 100% of the late fee goes to you. While the screening process is used to assess the quality of the tenant, there is no guarantee. The class of the rental (C vs A), unforeseen tenant circumstances (e.g. losing a job), etc. can factor into it. Hope that helps!
@Neil Whitney Good job on taking action. Finding a good management company is very hard to do there are so many bad ones out there. I work for one and it is amazing the laziness and half a$$ness that is allowed, but it is because the owner doesn't constantly check on them. Good questions to ask are how do they run things? This is broad and will give a wide array of answers but just listen and see what they say, you can often learn a lot. I would also recommend calling them multiple times maybe from different numbers and see how they answer the phone, are they kind, fast and professional? If not I would steer clear because this is how they will treat your tenants and maintenance calls. I would also ask for references and CALL THE REFERENCES, ask them how the companies management was, ask about the quality and speed of their problem solving and any other questions you may find important. I would also ask how much they pay their maintenance people and/or contractors. I've seen it before from other management companies where they bill the owner 80$ an hour for a "plumbing issue" and have their 30$ hour maintenance guy do the job. Also google them and see the reviews and comments people leave after leaving, this can usually give you a good idea of the service they provide. Call brokers or agents in the area and ask who they would recommend because recommendations usually are the best way to get quality people in anything. Good luck and trust your gut, if something or someone doesn't feel right then steer clear!
@Michael Guzik @Dana Dunford Thanks for the information. I definitely will call references. I still am not sure about using a management company, it is only 25 minutes from home and we have been doing well so far self managing our other properties. That being said as I acquire moor doors I intend to have all my properties managed by someone other than me so this could be an opportunity to test the waters. My goal when I created this business is to not create another job but to replace myself as soon as possible. I figured at 12-15 doors it would be worthwhile we now have 7, but since day 1 we have budgeted for a management company in our figures. Thanks to bigger pockets calculators!
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