I'm not sure what's eating up $300 - $400 every month. Most managers will charge 10% which is only $60. Either you have a property that's a real mess or your manager is being really generous with your funds. Is your manager providing you invoices for the repairs? Are they justified?
You can start by going to www.narpm.org and search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start.
1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!
4. Review their lease agreement and addendums. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.
I hope this basic guide helps. If you have specific questions about property management, I'll be happy to help!
Originally posted by @Sachin Amin :
I have couple of units and the rent on them is appx $600.. but there are some or other repairs or expense every month my prop mgmt company shows on monthly statement anywhere around from 200-300.. with this taking huge dip on my rents... any recommendations
Hi Sachin, we work with several different property managers depending on the size, location etc...of the property. I have a couple of recommendations for you. Feel free to PM me. Best of luck with everything.
Yes I have the 9% with this one, but these are 80 yr old units and I had to rehab them to get rental ready. But something or other comes up every other month.. I am building my own analytics so I know by end of year what’s the income and outgoing expense so I get a net picture and determine if it’s worth it or not..to hold them any longer for rents or get out of it
What amount have you budgeted on a monthly basis for things like utilities, landscaping, repairs & maintenance, capex, pest control, etc? And by how much is the property manager exceeding this? It is not unusual for expenses to eat up several hundred dollars a month for multiple months in a row, when dealing with old houses.
@Sachin Amin are your units SFHs?
They are multi units
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