Property management maintenance fees?? where are you at

5 Replies

Hi All,

got a question about property management just so we can compare numbers. I'm wondering how much most of you pay for the maintenance portion of your property management company. Do you pay just how much their handyman estimates. Do you get a set list of standard prices? Is there a minimum charge even if they're only on site for 10 minutes?

example 1: simple toilet clog. Handyman spends 2 minutes getting it unclogged. Are you being billed the $50/h rate at a prorated rate or are you handing over $50 as the minimum for such a call

example 2: a garbage disposal needs replacing. Are you getting charged $50/h for something that said they spent 2 hours at or do you get a set price list that says all garbage disposals are $75 labor+ $100 for the unit. (I can replace one in 20 minutes)

Thanks!

@David Zhang these are excellent questions, and I would build a list of questions like these to use with each property management company. I have a 20 unit that is out of state, and after almost two years of working with them I am still not sure exactly how we are billed. In addition, I recently went there with my partner to inspect the work, and found most of the work they did to be sub standard in every way. 

We do get quotes for anything over $200, and that helps us some. The company subs out the larger jobs, and we have very little control over how much a plumber costs, etc. I think they have a minimum of $35 fee just to show up. 

This is one of the primary reasons that I am still self managing my 32 doors locally in the Berwyn and Lyons area here in Illinois. I will definitely move my portfolio to management once it is in "maintenance" mode, but as I have grown it is tough to give up control on these items. If you are local, you do have the ability to "manage the manager" a bit more. You can also build up your own maintenance and contractor crews so you aren't as reliant on whoever the PM finds. 

Originally posted by @David Zheng :

Hi All,

got a question about property management just so we can compare numbers. I'm wondering how much most of you pay for the maintenance portion of your property management company. Do you pay just how much their handyman estimates. Do you get a set list of standard prices? Is there a minimum charge even if they're only on site for 10 minutes?

example 1: simple toilet clog. Handyman spends 2 minutes getting it unclogged. Are you being billed the $50/h rate at a prorated rate or are you handing over $50 as the minimum for such a call

example 2: a garbage disposal needs replacing. Are you getting charged $50/h for something that said they spent 2 hours at or do you get a set price list that says all garbage disposals are $75 labor+ $100 for the unit. (I can replace one in 20 minutes)

Thanks!

 David, I been on both sides, as landlord, landlord searching for PM, and as a contractor in the IT field.

I self manage mainly, and for small jobs, I do have plumbers and handyman handling. And they do cost around $100.00 to show up and change a washer on a faucet, a leak under the sink etc. I have interviewed some PM's for a property a little further away, and one I interviewed, he wound up interviewing me. He asked if I used a landscaper, handyman, and plumber. Told him I do and his answer was if these guys are doing a good job, you don't need me to call them, you can call them yourself. His fee at the time was 10% of the rent and he said for me to spend over $2,000 for him to make 6 phone calls a year wasn't worth it.

Turns out here, and most everywhere, it's finding people doing these small jobs that proved most difficult, because no one wants to pay for it. I had an older triplex, constantly had leaks, when the plumbing is fixed I had find someone to patch wall and ceilings. I'm an IT guy and programmer, once needed some guy to patch a hole in the ceiling from a bathtub leak, a handyman/contractor told me his minimum job is $300/day, so just a hole in the ceiling is not worth it for him. Suggested I find enough work to make it a $300 project. He was not the only contractor at the time that gave me a $300/day figure.

I started a business selling and installing accounting systems. People felt comfortable with me and had me do technical work on their computers. Unfortunately some of the work is simple for me, and it takes 30 minutes to install a circuit board for instance, and some folks feel it's only worth $35.00. I done that for a year, spent hours running around town doing $35 jobs, spend more time showing up giving free quotes, and you spend a busy day running around billing $100. Sounds good in theory saying you're the boss, but doesn't pay the bills. Sounds good to the customers though, got someone charging them for 20 minutes of work. Found out that when customers ask for a quote, I'm actually giving them an idea what the problem is, and what to do, and after that, they don't need you anymore. But if you charge money to show up, they'll say "the guy has to nerve to charge just to show up".

That's why when my tenant calls about a leak under the sink, I call my plumber, he says I'll take care of it tomorrow morning at 8:00am and it'll be around $100. I say "great". Did I try having tenants handle these small repairs? Yep! Their idea of fixing a leak under the sink is to put a pail there. Problem is they don't always remember to empty the pail.

Thanks for the info guys :)

Yeah I've been doing a lot of the work myself or with a couple calls to handymen. Obviously the ultimate goal is to have it in complete passive mode where I'm not even looking at maintenance items except for once a month.

The thought of having a minimum 35-100 trip per trip charge is scary. I mean....3-7 of those could eat up all your profits. I do student rentals too so they call like once a week for small things.

@David Zheng . Typical service call is 60 Bucks for me. Most repairs are 150 or less. Things like AC unit fixed or windows or drain clogs. Stuff like that. For small stuff like 200 or less theynjudt initiate the repair and then upload the bill. For bigger stuff I get a quote then OK the repair or ask for multiple quotes .
Originally posted by @David Zheng :

Thanks for the info guys :)

Yeah I've been doing a lot of the work myself or with a couple calls to handymen. Obviously the ultimate goal is to have it in complete passive mode where I'm not even looking at maintenance items except for once a month.

The thought of having a minimum 35-100 trip per trip charge is scary. I mean....3-7 of those could eat up all your profits. I do student rentals too so they call like once a week for small things.

 Dave, it depends on your cash flow situation. I started with little, in the beginning did more of the nuisance work. Then 10 years into it, my cash flow was up to $30K/year, including covering several thousand a year in small nuisance repairs. If you don't have the cash flow, it looks scary.

I know paying a plumber $100 to change washer sounds silly to some. I know two brothers in my area, who started investing the same time we did, bought 2 triplexes like us, and then sold it about 8 years later, and bagged over $100K appreciation for each, totaling $200K. Appreciation in NYC is pretty good. Reason is they couldn't keep up doing the repairs themselves, and stuff like $100 paying for plumbers sound silly to them. We kept ours for 20 to 25 yrs, and one went from 150K to $500K, the other from $180K to $750K. We made over $800K in appreciation compared to their $200K. what kept us going was we were willing to spend the going rate on the repairs. 

So it's two different approaches, two different results. Bottom line is, repair costs are ridiculous, but so are the property appreciation rates.