Is my property manager cheating me?

18 Replies

Hello , I'm new to the real estate game and would appreciate any help from everyone.  I moved to a new house in May and decided to rent my old house.  I lived there for 2 years and have no major issues.  The house was built in 2008, so it is fairly new.  I've had my first tenants since July, and I've had more months with major repair bills than those without.  

Abridged list:

- Before moving i removed my Nest thermostat, and hired them to install a different one.  The AC was off for a month.  The thermostat was installed, however this caused a leak in the ceiling.  I'm not sure if this was from a build up of condensation.  The repairs and paint cost $500.

- There were multiple repeat visits to repair the AC unit, including rewiring.  At this point, the total costs for AC issues is over $1000.

- Last month, on my invoice listed a broken window that was replaced in the foyer due to temperature changes in the winter months.  This was another $500.

Is there a way I can validate these are legitimate repairs?  I drive by monthly, but there is only so much I can see from the outside.  Is contacting the tenants for information an abnormal approach?

Thank you,

David

You need to set an amount that the PM can use for repairs before you have to approve. I self manage but mine would be $100. Anything over that would require my approval. If your just starting out, I'd suggest you take over the management and start making money.

I would. Maybe Set up an appointment to check out the new window....quality of install etc. then either talk to the tenants while you make the appt. or while at the property.
Whole window? Replacement sashes? Or just the glass...I don’t think window glass is replaced in newer windows, just buy a new sash. Windows shouldn’t break due to temperatures. Do they give you the receipt for the order if the new window?...not the total job but the part they had to order? My dad told me to ask auto repair shops to return my replaced parts to me...same thing.

@David Trinh You'll find yourself a little between a rock and a hard place.  At the outset, most PM agreements will have language that for repairs below a certain threshold (mine is $300) they will just do them and not contact the owner.  For repairs above that threshold they will contact the owner and the owner can ask for competitive bids.  Each PM agreement is different so I would encourage you to look at yours.  

The rock vs. hard place is that you can get external contractors and receipts but odds are those repairs will cost more than if they have their handyman do it.  I'm sure in Dublin there are A/C guys that advertise on the radio, TV, etc.  Quality aside (I've had my own "challenges" with A/C guys) it's unlikely that a larger company is just going to straight-up commit fraud and charge you for work that wasn't done, fake an invoice, etc.  Is it easier for "Tony the handyman" that works for the PM company to do some work and for the PM to forge some kind of receipt?  Sure.  Is it likely?  I don't know, your mileage will vary.

Something else that you can potentially do is insist that any high(er) dollar repairs like a window replacement be paid using your credit card.  Or maybe you just insist that they photograph and upload materials receipts from Lowe's, Home Depot, etc. to your owner portal.  If you want them to use your credit card you could always fake a reason like you want to miles or something like that.  You could insist on before and after pictures but if your PM is already defrauding you then they can just break the window and take a picture as the "before" and it doesn't really solve your issue.

Rambling aside, I don't think you want to go contacting the tenants.  The last thing you want is for them to have you to complain to about any random thing.  Especially if there have been issues about windows, A/C challenges, etc.    

If this is your only rental...and you live close enough to drive by once a month....can I ask why you are using a PM?

For a cracked window, how new is it? I have had two cold weather breaks. A new slider window pane a week after install, probably a chip at the edge of the glass during manufacture. Another cracked first winter after install, tight install. Blown seal and clouding can happen any time so I dont question that. As for Ac, you need itemization and talk to th ac company or hire your own. For big ticket items you should get more estimates. I think this started small but considering where it has gone you need another opinion.
Originally posted by @David Trinh :

Hello , I'm new to the real estate game and would appreciate any help from everyone.  I moved to a new house in May and decided to rent my old house.  I lived there for 2 years and have no major issues.  The house was built in 2008, so it is fairly new.  I've had my first tenants since July, and I've had more months with major repair bills than those without.  

Abridged list:

- Before moving i removed my Nest thermostat, and hired them to install a different one.  The AC was off for a month.  The thermostat was installed, however this caused a leak in the ceiling.  I'm not sure if this was from a build up of condensation.  The repairs and paint cost $500.

- There were multiple repeat visits to repair the AC unit, including rewiring.  At this point, the total costs for AC issues is over $1000.

- Last month, on my invoice listed a broken window that was replaced in the foyer due to temperature changes in the winter months.  This was another $500.

Is there a way I can validate these are legitimate repairs?  I drive by monthly, but there is only so much I can see from the outside.  Is contacting the tenants for information an abnormal approach?

Thank you,

David

 Contacting the tenants would be abnormal yes. If your interested in having a dialogue with the tenants & are involved enough to drive by monthly why not just manage the thing yourself? Sounds like you have created more work trying to manage your manager then if you just managed the property.

As for how to mitigate the risk of being ripped off you could

  • Ask for photos of the repairs.
  • Make sure the Property Management Company is a licensed Brokerage.

Thank you everyone for your input!  I will definitely get in contact with the property manager and ask for proof of their services.  I will also post updates as I have them.

As for why I don't manage the property myself, I have a couple of reasons.  I already have a full time job that requires me to be on call on occasion, I did not like the idea of being on call for the house as well.  The other reason is I started an MBA program.  Classes start after work and end at 10 PM, so I have plenty to keep me occupied.  Once I am finished with the MBA, I plan on reassessing managing my own properties.

Thanks again!

David

I have a rental where I replaced many broken window panes prior to the tenants moving in.  I was charged with repairing another pane...then two months later I had another pane replaced on my monthly statement.  I was a bit miffed so I called the property manager.  First pane was replaced because someone broke into the foyer and stole the tenant's bicycle.  She felt we should cover it.  Second pane was replaced because they had some friends come over and knock on the window and it broke.  I reminded the property manager that the tenant is responsible for any repairs above and beyond normal wear and tear.  I agreed to cover the repair of both panes but mentioned any broken windows going forward will be the tenant's responsibility.

Honestly, I've lived on my own since I was 18 years old and have owned and lived in the same house since 1996.  I have never had a window pane spontaneously break out of normal wear and tear.  I would call the property manager and push back.

Originally posted by @David Trinh :

Hello , I'm new to the real estate game and would appreciate any help from everyone.  I moved to a new house in May and decided to rent my old house.  I lived there for 2 years and have no major issues.  The house was built in 2008, so it is fairly new.  I've had my first tenants since July, and I've had more months with major repair bills than those without.  

Abridged list:

- Before moving i removed my Nest thermostat, and hired them to install a different one.  The AC was off for a month.  The thermostat was installed, however this caused a leak in the ceiling.  I'm not sure if this was from a build up of condensation.  The repairs and paint cost $500.

- There were multiple repeat visits to repair the AC unit, including rewiring.  At this point, the total costs for AC issues is over $1000.

- Last month, on my invoice listed a broken window that was replaced in the foyer due to temperature changes in the winter months.  This was another $500.

Is there a way I can validate these are legitimate repairs?  I drive by monthly, but there is only so much I can see from the outside.  Is contacting the tenants for information an abnormal approach?

Thank you,

David

 Hi David, property management can be a challenge.  There are some great PM's and some that are....well lets just say not as good as others.  Frankly, it's been trial and error for me to find the right people to work with and I use different property managers on different projects.  As it's your property, contacting the tenants is not unusual as long as it's done properly.  But if you are having to do that and also pay a property manager, it defeats the purpose of having a PM in the first place. There are some fantastic property managers in Columbus. PM me for more info.  Best of luck with everything! 

Originally posted by @David Trinh :

Hello , I'm new to the real estate game and would appreciate any help from everyone.  I moved to a new house in May and decided to rent my old house.  I lived there for 2 years and have no major issues.  The house was built in 2008, so it is fairly new.  I've had my first tenants since July, and I've had more months with major repair bills than those without.  

Abridged list:

- Before moving i removed my Nest thermostat, and hired them to install a different one.  The AC was off for a month.  The thermostat was installed, however this caused a leak in the ceiling.  I'm not sure if this was from a build up of condensation.  The repairs and paint cost $500.

- There were multiple repeat visits to repair the AC unit, including rewiring.  At this point, the total costs for AC issues is over $1000.

- Last month, on my invoice listed a broken window that was replaced in the foyer due to temperature changes in the winter months.  This was another $500.

Is there a way I can validate these are legitimate repairs?  I drive by monthly, but there is only so much I can see from the outside.  Is contacting the tenants for information an abnormal approach?

Thank you,

David

Hi David 

It sounds like the PMC is running through your account. The situation you described is the exact reason I d not like PMCs. I would tell them they must contact you for any repair authorization. I would also demand before and after pics.

I don’t understand why the removal of your thermostat and the install of another caused the damage. Unless they did not adjust it to turn on and off at a set temperature it should work no differently than the one you removed. 

David, I would suggest you self-manage at least for a little while. It really doesn't take much time especially for a single unit.  In my experience the biggest time suck is turnover.  Fixing the A/C would've been a 15 minute job, call 2-3 guys and set up an estimate.  You don't need to do the work yourself, you can hire it out yourself.  One of the big benefits to doing this is you can start to get a feel for how much stuff goes wrong and how much it costs.  I self-manage 6 units, have a full-time job, am basically always on call, and have 2 small children.  It's completely doable.  

@Joshua Dorkin , what's with all of these old posts showing up in the forum as last message having been 12 minutes ago or so? I've come across a number of them and there haven't been answers in many days.

$1k on an AC unit in a 10 year old house? It might still be under warranty! And the window failing because of “winter weather “? That is such a weird reason I would demand from them a detailed explanation and make them take pictures of future repairs. Or just get another PM.

I would not hesitate to contact the tenants about this. They would probably be happy to talk with an owner that actually cares about their property. Ask them if they are happy with the PM.