Property Managers Suck
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Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
7yTenants in Australia are not Savages compared to what you find in USA that's the difference.
For example you would never find a war-zone in Australia. Best comparison is your Detroit A area is your average C area in Australia.
So you aren't comparing apples to apples. Then Australia has higher priced homes compared to markets in USA. Again tenant quality is going to better with respect to cost of living.
52 Replies
- Member since 2018 · 11 posts · 8 votes7y
I work with a few property owners who "manage" their own properties while I provide (lots of) support; I've worked both with professional property managers and owners, and the owners are definitely more diligent and their personal interests are obvious. Maybe this is the route you need to take? One of my clients is the official manager, but I handle most of the tasks, and it's a partnership that's worked very well. Just a thought.
- Melbourne, Vic · Member since 2019 · 4 posts · 0 votes7y
Has anyone considered treating PM expenses like a business and offer some sort of incentives for the PM for performance? As in the individual manager
Speaking as foreigner and having not bought yet. It sounds like you really need to do the research, you have to source a good PM company in a city like Detroit, this sounds like its difficult in itself. Then you get the actual property manager.
Australia, In sales, there is commission bonuses for sales over reserve etc.
The Service based industry in USA seems to rely on tipping.
Is there some viable actions to compensate lower turnover, damage, blight fees (I heard if the lawns are too high, you get slapped with county fees) etc? even off the books - movie tickets, club membership or some sort of appropriate remuneration.
Trying to think outside of the box, to improve consistency, performance and sustainable relationship between PM, Tenant and landlord.
@Michael Simolke What is the average porfolio a PM handles in major cities? Is there a legal limit? for example In melbourne a junior might have 60-80, standard 140-180, pushed at 220-240
Thoughts @Marisa R.
good points there @Chris Shepard, albeit not sure if the hands off approach would work too well in the lower socio areas. You and your brother must be on a winner there though! Ive hit the tables and played a few good hands, took the winnings and vowed never to return back!!
Cheers
Nick
- Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes7y
Originally posted by @Nicholas D.:
Has anyone considered treating PM expenses like a business and offer some sort of incentives for the PM for performance? As in the individual manager
Speaking as foreigner and having not bought yet. It sounds like you really need to do the research, you have to source a good PM company in a city like Detroit, this sounds like its difficult in itself. Then you get the actual property manager.
Australia, In sales, there is commission bonuses for sales over reserve etc.
The Service based industry in USA seems to rely on tipping.
Is there some viable actions to compensate lower turnover, damage, blight fees (I heard if the lawns are too high, you get slapped with county fees) etc? even off the books - movie tickets, club membership or some sort of appropriate remuneration.
Trying to think outside of the box, to improve consistency, performance and sustainable relationship between PM, Tenant and landlord.
@Michael Simolke What is the average porfolio a PM handles in major cities? Is there a legal limit? for example In melbourne a junior might have 60-80, standard 140-180, pushed at 220-240
Thoughts @Marisa R.
good points there @Chris Shepard, albeit not sure if the hands off approach would work too well in the lower socio areas. You and your brother must be on a winner there though! Ive hit the tables and played a few good hands, took the winnings and vowed never to return back!!
Cheers
Nick
Hi Nick
I wish it were that easy, I don't think the Australian model will work too well in Detroit.
The issue with property management which is a big one is the % they skim off the top when repairs are required. This is one of the major hurdles. As I said I have been working through this process its taken time to source good property management but not impossible. Key in Detroit is property management, you will not cash flow if you don't get this right
Whereas in Atlanta its been far easier to deal with property management, there is more choice, but once again they like to skim off the top when it comes to maintenance. I have my own maintenance/handyman in Atlanta, what can I say WhatsApp works very well
- Melbourne, Vic · Member since 2019 · 4 posts · 0 votes7y
What a minefield. Yes I heard the same from another investor with the maintenance and sneaky addon charges being a grey area if not monitored or setting the rules upfront.
Will have to get over there when I can and network with the PM's
- Investor · Portland, OR · Member since 2012 · 163 posts · 121 votes7y
@Nicholas D.
Hey Nick,
Thanks for the mention. I am going to stick to my guns when it comes to the levels of service for property managers.
You can get concierge/ valet service. (Very expensive, but they do a very good job).
A value service which includes coordination of maintenance for a % that is negotiated.
Or a dirt cheap service which will do everything they can to avoid having to deal with any problems or maintenance. Meaning they will ignore tenants and defer maintenance until a property becomes dilapidated and is in total disrepair.
Being a real estate investor as well as a property manager, I’ve found that you need a management company that will actively take care of maintenance problems for you. And as well you need to know that they are making sure that they won’t continue to be problems and that if they notice anything else at the property that could be problemsome, that they take care of that too.
The reason why this is such a big deal for us is because we own a lot of 40-100+ year old property which experiences a decent amount of repairs.
Being a real estate investor, I’ve found that these properties produce the highest returns, but as well are more difficult to deal with. If there is a major repair on any property that we manage we collaborate with the investor and our contractors to ensure the best solution to the problem.
Cheers!
- 7yBrad LarsenPro MemberProperty Manager · San Antonio and Austin, TX · Member since 2016 · 377 posts · 380 votes
@Marisa R. It would be helpful for you to read this article on what Property Managers would classify investors. I'm not saying you are in any category, but a little self-reflection may help in your dealings with US based PM's. Also, I have been to Australia and spoken at their PM conferences - there is a difference. But, for you to make that blanket statement is unfair to our industry and disrespects our country.
https://www.biggerpockets.com/forums/52/topics/402958-investors---are-you-a-c-class-landlord?page=1
- Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes7y
Originally posted by @Brad Larsen:
@Marisa R. It would be helpful for you to read this article on what Property Managers would classify investors. I'm not saying you are in any category, but a little self-reflection may help in your dealings with US based PM's. Also, I have been to Australia and spoken at their PM conferences - there is a difference. But, for you to make that blanket statement is unfair to our industry and disrespects our country.
https://www.biggerpockets.com/forums/52/topics/402958-investors---are-you-a-c-class-landlord?page=1
Definitely not disrespecting USA, one of my favourite countries to travel and invest. Love the entrepreneurial spirit, we lack this in Australia. I apologise if I offended, not my intension whatsoeverSharing my experiences on property management the good, bad and ugly is why we come onto forums so we can learn from others.
- Investor · Adelaide, South Australia · Member since 2015 · 136 posts · 78 votes7y
PM's in Australia can also suck. One useless PM brought her boyfriend and their fast food along to an inspection. Not a big deal but not very professional either. She was fired by the company shortly afterwards...
What made the PM give you notice Marisa?
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Marisa R.:
Originally posted by @Brad Larsen:
@Marisa R. It would be helpful for you to read this article on what Property Managers would classify investors. I'm not saying you are in any category, but a little self-reflection may help in your dealings with US based PM's. Also, I have been to Australia and spoken at their PM conferences - there is a difference. But, for you to make that blanket statement is unfair to our industry and disrespects our country.
https://www.biggerpockets.com/forums/52/topics/402958-investors---are-you-a-c-class-landlord?page=1
Definitely not disrespecting USA, one of my favourite countries to travel and invest. Love the entrepreneurial spirit, we lack this in Australia. I apologise if I offended, not my intension whatsoeverSharing my experiences on property management the good, bad and ugly is why we come onto forums so we can learn from others.
keep in mind its the investors that do this to themselves.. they buy C and D class and expect the tenants to act like A class tenants.. its not PM its the investor choosing to buy a property with the toughest tenants to manage..
its a thankless job and frankly the PM's are underpaid.. not over paid.. its a combination of baby sitting.. drama control and then how to handle destruction after the fact and then your the PM and your not calling the owner to wish them a happy week the only time you talk to them is when something bad happens.. which is often in the lower end rentals and can be avoided by buying nicer properties in nicer areas.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes7y
It's also interesting that Marisa would bring up the cost of PM in America. Why? Because I'm learning how to raise my fees by listening to a very successful Australian who happens to coach property managers on how to squeeze more money out of management.
The DIY Landlord Book4.7248 Reviews - Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes7y
Originally posted by @Nathan Gesner:
It's also interesting that Marisa would bring up the cost of PM in America. Why? Because I'm learning how to raise my fees by listening to a very successful Australian who happens to coach property managers on how to squeeze more money out of management.
We've found that a blanket policy of no discounts whatsoever works great. We have advertised discounts at a certain sized portfolio but everything else, this is the price; take it or leave it. Most people will do business with you with or without the discount. They are just asking for it because, why not......
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes7y
Originally posted by @Nicholas D.:
What a minefield. Yes I heard the same from another investor with the maintenance and sneaky addon charges being a grey area if not monitored or setting the rules upfront.
Will have to get over there when I can and network with the PM's
Are these actually sneaky ad on's or gray areas in reality? You sure it just isn't the cost of doing business. Stuff breaks & needs to be fixed. You really think PM's make their money by making up $80 service calls? In some states it take years to be able to get the licensing to open up your own Property Management business, who's throwing that away to steal $80 from some schmo? Folks that make those type of allegations typically have no idea what actually goes into operating a rental property.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @James Wise:
Originally posted by @Nathan Gesner:
It's also interesting that Marisa would bring up the cost of PM in America. Why? Because I'm learning how to raise my fees by listening to a very successful Australian who happens to coach property managers on how to squeeze more money out of management.
We've found that a blanket policy of no discounts whatsoever works great. We have advertised discounts at a certain sized portfolio but everything else, this is the price; take it or leave it. Most people will do business with you with or without the discount. They are just asking for it because, why not......
to me if a PM wish's to go into the tough to manage properties this is more portfolio management not normal PM and if I was in the business my rates would reflect that.. I just think back to my days when I started selling real estate in 1975 I took on the hard to sell properties. but I charged double to triple what the other brokers charged.. but I actually sold them. as opposed to listing sitting for 2 to 3 years.. it was a niche I carved out.. and these were tough to sell properties so I got compensated for that..
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes7y
@James Wise I'm transitioning to a three-tier system by year's end. My lowest rate will be lower than the competitors but offering the same services or better (glorified rent collection). My middle rate will be the standard with most of my services included and a few add-ons for additional fees. My third rate will be the all-inclusive package.
Other companies and coaches like Darren Hunter say that clients prefer to have choices. I guess it empowers them or something. About 10% choose the cheapest option, 10% the highest, and 80% the standard. So it balances out to the standard level.
The best part is, I can use my lowest rate in my advertising and attract new business.
Rates starting at 6%!!!
The DIY Landlord Book4.7248 Reviews - 7yGina SternPro MemberInvestor · Boca Raton, FL · Member since 2019 · 1k+ posts · 159 votes
From my experience it depends on the area you are investing in. Some areas have better PM's than others.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes7y
Originally posted by @Nathan Gesner:
@James Wise I'm transitioning to a three-tier system by year's end. My lowest rate will be lower than the competitors but offering the same services or better (glorified rent collection). My middle rate will be the standard with most of my services included and a few add-ons for additional fees. My third rate will be the all-inclusive package.
Other companies and coaches like Darren Hunter say that clients prefer to have choices. I guess it empowers them or something. About 10% choose the cheapest option, 10% the highest, and 80% the standard. So it balances out to the standard level.
The best part is, I can use my lowest rate in my advertising and attract new business.
Rates starting at 6%!!!
In my experience advertising your services based on having the lowest prices in town is only going to attract the wrong type of clientele. Essentially the folks who are all saying that "PMs Suck" are the folks who shop PMs based on price. That ain't the type of business you want to use as your baseline for growth.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes7y
Originally posted by @James Wise:
Originally posted by @Nathan Gesner:
@James Wise I'm transitioning to a three-tier system by year's end. My lowest rate will be lower than the competitors but offering the same services or better (glorified rent collection). My middle rate will be the standard with most of my services included and a few add-ons for additional fees. My third rate will be the all-inclusive package.
Other companies and coaches like Darren Hunter say that clients prefer to have choices. I guess it empowers them or something. About 10% choose the cheapest option, 10% the highest, and 80% the standard. So it balances out to the standard level.
The best part is, I can use my lowest rate in my advertising and attract new business.
Rates starting at 6%!!!
In my experience advertising your services based on having the lowest prices in town is only going to attract the wrong type of clientele. Essentially the folks who are all saying that "PMs Suck" are the folks who shop PMs based on price. That ain't the type of business you want to use as your baseline for growth.
Quick story for you.....I sold this apartment building 2 years back. 3 investors formed an LLC. Nice building, nice sized commission check $35,000 or so. There is this one property management company in Cleveland who's got really cheap prices. Buyer's of this building went with them as they cheaper than my company. Cool man, no problem I made $35,000 on the deal, no skin off my back.
About a year later the buyer's partnership broke up & they were all going their separate ways. You think they had the cheapo company sell it for them? Nope, they came to me because I am the best. People ask me for discounts & I say pound rocks dude I am the best, no discounts. You want the best? Pay for it. So I made another $35,000 on that building.
So in summary over the last two years I made $70,000 on that building and had to deal with zero tenant issues. Other company had to grind it out day in & day out for pennies. Not the part of the game I want to be in. New buyer kept the cheapo company on as well. Again cool with me. i've made $70,000 brokering two deals on this sucker. No skin off my back. If the new buyer ever decides to sell I like my chances of being the broker a lot more than Joe blow discount over there. Competing on the lowest price eventually leads to operating in an unprofitable fashion with investors who will never appreciate the service you are providing them.
- Rental Property Investor · Houston, TX · Member since 2019 · 15 posts · 10 votes7y
@Marisa R.
In my opinion, you might want to re-examine your PM Agreement. If they are not holding up their end of the bargain, your agreement is what you both are going to refer to for resolving the issues, and if you get an attorney involved.
If something is not specifically in the agreement, they don't have to do it.
Also, keep the lines of communication open with the PM as they should be a valued and trusted resource.
Your requests should be reasonable but explicitly clear so you both know the level of expectations, and they cannot come back later and say they didn't understand.
- 7yPeter TverdovBusiness MemberDeveloper · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
As the owner of a property management company in Central NJ, I have also told certain clients to take a hike because they wouldn't listen to my suggestions, they would meddle, lie, etc and it just created headaches for me or caused me lost rent in some cases.
Basically, if you are causing me more headaches than the tenants, take a hike - not worth it. This is a low margin business, not enough people grasp that concept.
The fact that your property manager fired you speaks to some issues you have with expectations of your PM and how things are done. Own that and learn from it.
- 7yNed J.Pro MemberInvestor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
And there are plenty of POS landlords too..... some people are just not good at their jobs and some clients are just a huge PITA no matter what you do or how good you are..... that's the nature of our society.
EVERY profession has people that just suck at their job....... so making a big blanket statement about all PM's is pretty unfair. And how many PM's are there in this country/state/county? And how many have you dealt with?
- Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes7y
Originally posted by @Jordan Sinclair:
PM's in Australia can also suck. One useless PM brought her boyfriend and their fast food along to an inspection. Not a big deal but not very professional either. She was fired by the company shortly afterwards...
What made the PM give you notice Marisa?
The PM (owner of the business) gave me notice, because I queried why she did not have a set of keys for my property.....
She has lost all her staff now and I don't believe she should be operating. as she is not capable of providing a good service
- 7yBrad LarsenPro MemberProperty Manager · San Antonio and Austin, TX · Member since 2016 · 377 posts · 380 votes
Originally posted by @Marisa R.:
Originally posted by @Jordan Sinclair:
PM's in Australia can also suck. One useless PM brought her boyfriend and their fast food along to an inspection. Not a big deal but not very professional either. She was fired by the company shortly afterwards...
What made the PM give you notice Marisa?
The PM (owner of the business) gave me notice, because I queried why she did not have a set of keys for my property.....
She has lost all her staff now and I don't believe she should be operating. as she is not capable of providing a good service
This makes total sense. One bad PM who is on their way out of doing business in a war zone some people call Detroit....and ALL PM's now suck. Wow. I want to edit my first statement to indicate YOU are a "C" Class or worse landlord. Don't think that is fair? Neither is insulting our industry and our country.....under which you have the landscape to become an "investor". @James Wise @Nathan Gesner
- 7yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
There are good and bad PM, just like every other profession. At the end of the day, no one is going to care about your property or have as much invested in it as much as you do. If your property sits vacant for a month, it doesn't cost the PM much money, but it sure as heck hits your pocket book.
You need to find someone you can trust and then let them do their job.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes7y
@Brad Larsen this whole conversation is laughable. She says our PMs suck, but then admits she has some good ones. What probably happened is she didn't screen her managers properly, hired a bad performer, and then fails to admit she played a role in the whole fiasco.
There are Landlords that claim all tenants suck. This is their experience because they are amateurs that don't know how to properly screen and find the good ones. My experience is much better because I take the time to screen and choose wisely.
She should do the same.
The DIY Landlord Book4.7248 Reviews
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