Bad Property Management or Normal?

15 Replies

Hey everyone, I feel like I'm having a bad experience with my property management company, but I wanted to get some feedback for a sanity check. I definitely don't want to fire these guys just to find out that they were pretty much the average.

This is for a single-family home in eastern North Carolina, in a military town.

First, my receipt of rent fluctuates from the 4th to as late as the 12th each month, despite my confidence that they receive rent from the tenant on time in all cases. 

Second, on all tenant turnovers, they've tried to charge me ~$500 for "prep and paint as needed", with no breakdown of what needed to be painted, nor a list of what actually got painted. They tried this once after a short turnover of 3 months since the last painting, and were told to pound sand.

Additionally on tenant turnover, they have a tendency to try to charge me for things that were obviously tenant inflicted, such as bent towel rods, etc. 

Finally, their record keeping bugs me. They have finally started using appfolio which helps,  but pending charges still tend to float around on assorted PDF files, and on those months which the tenant pays before the first, his payment wont show up in the current month's statement, this can be figured by doing some homework, but to me the whole point of property management is so I dont have to worry about some of this stuff.

So there it is. Please share your thoughts with me, so I can figure out whether this is bad business or if I'm just stressing over triffles.

@Mike Ferguson Working with PMs is like working with any other vendor in many ways. This might be a good time to walk through the expectations that you and the PM have of each other and how common situations will be handled, such as the ones you mentioned. I would ask questions about what is causing things such as the fluctuation of the rent receipt. Is it a result of when the tenants are paying the PM, for example? Also, you might want to check reviews of the company. I'm guessing you are either talking about Fort Bragg or Camp LeJeune...both of those areas are heavy rental towns, so there should be plenty of PM choices available.

@Mike Ferguson   OK here's my two cents...

The one point about which I think you're stressing about trivial things is the differences in the days the rent is deposited in your account. It's not unreasonable to expect the rent to be deposited in your account anytime up to the 15th. There's a lot of wheels turning in the process.

First of all is the delay in online payment processing. If a tenant pays online, it can take up to three business days (not including weekends and holidays) for the payment to be funded and posted to the PM's account. Once the PM receives the payment, there's the time involved to process the owner distribution payment, which is also subject to the weekend and holiday delay.

Consider that a holiday-heavy month like January is 32% weekend and/or holiday. But even a non-holiday month like March is still 29% weekend. And nothing happens in the banking world on weekends or holidays.

@Mike Ferguson : The simple fact of the matter is that turnovers are expensive. There is cleaning, paint/patch, repairs and carpet. Often there is vacancy time and a leasing fee to boot.

I can't say if $500 for a turn is expensive or not, as it really depends on the nature of the work and cost of materials + labor in your target market. I've paid up to 2K for a turn on some of my class-A SFRs just for the make-ready component.

So, basically expect to be paying some money on every turn.

The trick is to know what's actually necessary and what's not. I've heard some PMs who recommend a full repaint on every turn, which is outrageous. You should do a full repaint when you buy it, then do patch and touch-ups on turns. Expect a full interior repaint every 3-7 years, depending.

I would recommend you ask your PM to itemize the work, and see if it sounds right to you and other landlords in your area.

Regardless, you should always understand your PM's financial incentives. Do they make money on maintenance items? Does the fee structure incent them to turn every year, or have long-term tenants? What's the relationship between them and the people doing the work? Etc.

Hope that helps!


I think I can see where the PM may be coming from. I agree with above about the payments taking some time to the 15th. I too would be annoyed by this issue but then would call them up and have them explain the process of when they actually collect, issue late fees, etc. If its on the PMs end of administration I wouldn't fuss but if they're pocketing late fees then thats no good. 

Is this property in CA? I've heard that in that state you must paint between every single tenant no matter how bad. $500 bucks to paint an entire home is a fantastic deal but $500 bucks to do touch isn't so much. If I'm correct about this state law it may befit you to figure out what is getting painted/touched up. At the very least I would expect more of an explanation of what paint/prep is.

I would say you need to relax a bit in this situation. You're paying a company to do some work for you and its not going to be done exactly as you would do it. Have you read 'The E-Myth'? That book describes why so many small businesses fail is because the owner is getting too hands on the things he/she has hired out in order to be hands off. Unless you've created the system and hired the people and monitor the work of all the work being done and happen to employ robots the work will never be done exactly as you need. Take a step back, ask your self if you trust the company to deal with bad tenants, and ask yourself if you're making the profits you intended and if they are holding up to their end of the bargain.

@Fred Heller

Your logic makes sense, its just a shame in this internet linked world we live in that we still have such delays with money going from point A to point B. Maybe it's just the impatience in me. I am happy to hear that this time-range is normal though. 

@James Kojo  

I hear ya on turnovers being expensive, always seems to cost more when you're not the one living in the house! The $500 I mentioned was sold to me as a "touch up" paint job, on a 1450 square foot 3 bedroom home in eastern North Carolina. Like you say, if they had charged this for a full and complete paint job I would have been a happy camper. But to me being the glass is half-poison guy, I took touch up' to mean "we'll charge you $500 bucks and touch up a couple of spots in one room for 10 minutes with 10 dollars worth the paint".

The maintenance guys are in-house, and they tend to be the same people also doing the inspections, which strikes my nerve as a possible conflict of interest.

@Steven J.

Property is in eastern NC. You may be right on the needing to relax, that's the main reason I wanted to reach out, to make sure I wasn't stressing over nothing. 

I asked for a deeper explanation of "paint/prep" and was told, "It's basically self-explanatory, touch up of any small problems with paint". I pressed them on it and they promised to itemize what it was they were painting in the future. 

I'll definitely have to check out The E-myth, always looking to get my hands on a new book!

@Mike Ferguson It takes a special property manager to not take advantage of a client that is thousands of miles away. They are out there, but rare in my experience. 

@Mike Ferguson   I think I would just focus on the big picture and try not to get too hung up on the details.  I pay my owners at the same time every month, on the 15th, so that I have time for rent to be paid by the 5th, a few days for it to clear and a few days for me to have sent the payment ahead of the 15th so it will hit the owners' accounts by the 15th. 

$500 seems reasonable for touching up that sized home, but of course, it really all depends.  I think I would probably have a similar answer if a client asked what was painted. I have my handyman go through each room, fill nail holes, touch up paint and roll whole walls where there are lots of scuffs, etc.  There really isn't anything to itemize.

I agree that bent towel bars should be a tenant deposit deduction, but as an owner myself, I don't usually quibble over minor things like that with my own tenants.  Sometimes, things just break, and I would rather focus my energy on my business.  

So, long story short, maybe your PM could potentially be doing a better job, but it's hard to know.  Maybe just have a conversation about your expectations and maybe they can explain why the payments come at different times or offer to give you more details on the charges, etc?

As a property manager and investor in Eastern NC, I can say that $500 for a prep/touch up in a 1450 sq ft home does not seem unreasonable.  It is difficult in a basic touch up scenario to “itemize” each little spot, small nail hole, brush mark, etc. that may exist in a home.  I will say, as an AppFolio user, that if your property manager is using the Inspections feature then they should be able to share the inpsection report with you.  If used correctly, pictures can be attached to the report for your review.  

As for the money difference in dates, it is next to impossible to perform owner distributions on the exact same day each month.  Our policy is to perform two distributions each month.  One typically between the 13-17th of the month, and the second the 22-25th of the month to account for late payments or late clearing checks/deposits.   

@Brian Corbett That's a great point.  There is likely a photo documented inspection that your manager can share with you, and that would give you a great idea of what needed to be done to get the house back in shape @Mike Ferguson

@Brian Corbett I agree and am definitely not trying to get them to itemize down to the nailhole, I guess my angle is more about "touch up" being such a vague term that they don't necessarily have to do anything and they still pocket $500 bucks. I suppose I've got a bit of a trust issue there. I think before and after photos would be reasonable in such a scenario. 

As for payday, your 4 day window would be fine by me, its when I get up to 10 or more days disparity that I start to get a little irritated. 

@Dawn Brenengen You have a point, most of these are small items in the grand scheme of things. Mainly I just wanted to ensure that I wasn't being hosed by these guys, but it sounds like most of what they do is within reason based on expert opinion.

Lots of companies, ours included, give before and after pictures to show what was done. We’d break down towel rod and carpet. But just one line item for touch paint. It’s be way too time consuming to break down what areas were touched. That’s what the pictures are for.

I’m sure they are making money to work (I mean they do provide a service and should be paid) but it’s tough to buy your own island with maintenance people payroll on $500 touch paint jobs. :)

just saying, like anything in life, it’s a marathon and they most likely care more about their name and an extra $100 they could make on you.

I don’t own any rentals in NC, but own out of state rentals (I live in NC). With those rentals , the money is initiated to go to my bank account on the 5th and 7th of each month respectively. If either of those days is a weekend or holiday then it’s the next business day. Take 3-5 days to show up in my account. One way your PM can expedite this is my encouraging online payments.

One PM I use I believe charges the tenants 10 extra dollars to mail, hence they always pay online. My other PM doesn’t do this and therefore when the tenants mail it, it takes them almost 7 days usually to get it (local mail service is very slow).

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