First some stats: • I have 6 going on 7 doors in the DFW area • I live out of state • Rents range from 1400-1950 Per Month • I pay 8% Per Month • 60% of first month's rent on new leases • $395.00 flat rate for renewals Getting to the place where I'm considering looking for a new manager... Here is why... Looking for some advice if I'm being unreasonable and if from your experience you can get better rates. My complaints seem to be focused on maintenance issues. Here are SOME examples: • A unit was vacant and someone left a old microwave on the front step.. (Who does that by the way). Anyhow, I was charged $225.00 for "trip and disposal" fees to throw it away. Keep in mind that I was paying for garbage and they could have simply have thrown it away in the garbage can a few feet away. Weeks of back and fourth, they blame it on the contractor and refused to budge on the issue. I hate being "nickel and dimed" and this kind of thing just drives me crazy. • I get a notification of a leaky roof on a property. It includes photos of missing shingles and an estimate of 1200.00 to repair it. I follow up their email with a call and ask them why my 8 year old roof is leaking and their answer is "I dunno, doesn't really say... but it can be fixed." Duh... I ask them to get me a quote to replace the whole roof, they never did... they just ignored my request like it never happened and then followed up with me asking if I want to move forward with repairs. I literally call a roofer I found on Yelp who was amazing. He went out, told me I had significant storm damage and recommended I turn it into insurance. I was able to get a whole new roof with warranty, through no help of my property manager. When it came time to inspect the work, my property management company wouldn't go out and inspect because they didn't hire them.... Despite me asking them to get quotes and they ignored it. I ended up making a special trip out to inspect myself and purchased another property when I was out there. • Quotes to do painting and other make ready items are outrageous... I can easily get quotes with some phone work and significantly beat their quotes on virtually everything.... their price is about double.. And they claim the don't add on to their quotes from contractors. Getting someone on the phone can be challenging. Getting someone after hours is impossible... On the plus side, their online system is pretty good... all documents properly loaded, reports of who paid and when are accurate and the money is forwarded in a timely manner. Are these kind of stories par for the course? Am I being too demanding? Is the grass greener? I feel I'm overpaying for what "Service" they provide... Anyone with similar experiences? Advice?

@David Woz whenever there is a thread like this about a property manager, guaranteed over half the people automatically say "fire them" - no matter what the details. Anyone who has experience managing people knows you always try to address the situation before firing (unless there is theft or some other serious negligence). My experience: - 8% per month is pretty standard for a small portfolio - 60% first months rent is average, I have seen 50% to 100% - $395 flat rate for renewals seems high and seems like something you could negotiate - The $225 for disposal seems high, but in many places you cannot put appliances such as a microwave in the standard garbage. That being said, there are free or low cost drop offs and I am sure junk haulers that would charge half or less. - For the roof repair, it is hard to expect the PM to dig too deep into something like that. They are not going to get multiple quotes and the $1200 is way less than a whole new roof. I think that one you may have unreasonable expectations. For larger repairs, you will just need to do leg work if you want to shop around. - Pricing for things like painting and rent ready is tricky. Those are time sensitive jobs. Painter rates are usually different depending on how busy they are. They probably go to the same company out of convenience and may not even be aware how much they are being overcharged. It could have happened slowly over time. I would schedule a meeting and explain you have several issues that need to be resolved. Go through the list of issues, but be reasonable. Ask them for a plan to resolve. Things like the leasing fee, ask for a change in contract rate. Whatever you do, don't burn any bridges. The business community is a small world and PM know each other.

• 60% lease up fees - Market dependent. I personally would never pay them but fees vary by market. • $395 renewal fee - My market does not have renewal fees. Seems high. • Microwave charge - Should be around $50/hour. • Leaky roof - Unfortunately, not all PMs are going to think about storm damage. They should have followed up on the roof replacement quote. For a roof replacement, they should receive a construction management fee. • Painting and make ready charges - Most PMs use dependable, bonded contractors and will not shop like you would. • Getting someone on the phone should not be challenging. • Getting someone after hours would be unusual. 3rd party management can be challenging in state...out of state just adds to the challenge. May have to shop around...and factor in inefficiencies into your financial projections. Good luck.

IS it me, or my Property Manager?

Clifford Paul

Rental Property Investor · Member since 2018 · 483 posts · 956 votes

7y

Originally posted by @David Woz:

First some stats:

I have 6 going on 7 doors in the DFW area
I live out of state
Rents range from 1400-1950 Per Month
I pay 8% Per Month
60% of first month's rent on new leases
$395.00 flat rate for renewals

Getting to the place where I'm considering looking for a new manager... Here is why... Looking for some advice if I'm being unreasonable and if from your experience you can get better rates.

My complaints seem to be focused on maintenance issues. Here are SOME examples:

A unit was vacant and someone left a old microwave on the front step.. (Who does that by the way). Anyhow, I was charged $225.00 for "trip and disposal" fees to throw it away. Keep in mind that I was paying for garbage and they could have simply have thrown it away in the garbage can a few feet away. Weeks of back and fourth, they blame it on the contractor and refused to budge on the issue. I hate being "nickel and dimed" and this kind of thing just drives me crazy.
I get a notification of a leaky roof on a property. It includes photos of missing shingles and an estimate of 1200.00 to repair it. I follow up their email with a call and ask them why my 8 year old roof is leaking and their answer is "I dunno, doesn't really say... but it can be fixed." Duh... I ask them to get me a quote to replace the whole roof, they never did... they just ignored my request like it never happened and then followed up with me asking if I want to move forward with repairs. I literally call a roofer I found on Yelp who was amazing. He went out, told me I had significant storm damage and recommended I turn it into insurance. I was able to get a whole new roof with warranty, through no help of my property manager. When it came time to inspect the work, my property management company wouldn't go out and inspect because they didn't hire them.... Despite me asking them to get quotes and they ignored it. I ended up making a special trip out to inspect myself and purchased another property when I was out there.
Quotes to do painting and other make ready items are outrageous... I can easily get quotes with some phone work and significantly beat their quotes on virtually everything.... their price is about double.. And they claim the don't add on to their quotes from contractors.

Getting someone on the phone can be challenging. Getting someone after hours is impossible...

On the plus side, their online system is pretty good... all documents properly loaded, reports of who paid and when are accurate and the money is forwarded in a timely manner.

Are these kind of stories par for the course? Am I being too demanding? Is the grass greener?

I feel I'm overpaying for what "Service" they provide...

Anyone with similar experiences? Advice?

Doing this for 35 years now and I have dealt with some really bad property managers. Personally I would find a new one because like you I can't stand to be nickel and dime. There's some really great property managers out there but sometimes you have to kiss some frog's until you find the right one.

4 Reply

Christopher Reeder

Rental Property Investor · Auburndale, FL · Member since 2018 · 58 posts · 68 votes

7y

I have 10 doors and currently self-manage all my units. I'm considering when to begin using property management.

Having said that, I find in my day job this same problem dealing with suppliers. As a business, you have an expectation of the quality of service you expect for the price you are paying. The supplier, in this case your property management company, is providing their expected value for the price they are receiving. In your case, these 2 expectations are not aligned and will build resentment and frustration, likely on both ends.

My recommendation is to look for a new management company. While screening alternatives, be clear with your expectations; time of response, repair solutions (new or repair), reasonableness of costs, how do they vet contractors/repair companies. Ask for recommendations of other investors who are using them and their experience. Be aware this normally means you get the investors that will provide the best review, but we all will have some concern over time that needed managing outside the normal monthly interactions.

1 Reply

Kenneth GarrettPro Member

Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes

7y

@David Woz

You are being overcharged. The first issue is communication. In any business if there is a breakdown of some type it is generally communication or lack thereof. Not having them respond to direct questions is unacceptable.

Your property manager should be able to have the maintenance work done less expensive or at least at a reasonable rate. You can get nickled and dimed.

I self manage my units. I did hire a pm for my units that were 60 miles away. I fired them for terrible performance. Just didn’t care. It was so bad I tested them to see how they show a unit. Never went in the unit to make sure it was presentable, never called the prospective tenant to see where they were and sat in there car in front of the unit on there phone. I fired them the next day.

Hire a new pm.

Good Luck.

2 Reply

Robert Biggerstaff

Contractor · Pensacola, FL · Member since 2018 · 303 posts · 240 votes

7y

Fire them

0 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

7y

I'd also fire them. Let them know the poor communication is one of the main reasons and the other is how they handle maintenance and repairs. There seem to be a number of people from that area on BP and hopefully you can get the name of a good property manager from one of them.

I admit I did smile when I read "Despite me asking them to get quotes and they ignored it. I ended up making a special trip out to inspect myself and purchased another property when I was out there.". I'm imagining your trip out to find another property manager may result in house #8.

0 Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

7y

I would suggest you change PMs but do not expect frustrations to be reduced. You will likely just end up with different issues. What you are encountering is typical for OOS investors when dealing with a PM company. What you are experiencing is the frustrations of managing a PM as opposed to managing your properties.

You need to stay on top of your PM and make a couple of on site inspections per year yourself. Real estate investing is never passive especially as a OOS investor. Your risk is higher and requires much more supervision on your end.

3 Reply

Bryan L.Pro Member

Rental Property Investor · Brewer, ME · Member since 2016 · 45 posts · 20 votes

7y

Sounds to me like you're being overcharged but I'd be looking for a new manager simply because you're not able to get on the phone with someone who can answer your questions or address your concerns. You may be a small fish to them but I assume your portfolio is a large investment to you.

0 Reply

Account Closed

Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes

7y

So, you expect the management company to run around and price shop every time for every repair? And you think how much is fair compensation for that? How much is your time worth per hour?

I would have my own contractors too if I ran a management company and if the owner wanted to go around and get their own quotes - be my guest. You are not getting a discount for that. I would also likely take a percentage of every repair too, including the ones where the homeowner insisted on the contractor. General contractors usually charge 20% and the client does not always get a say in who the contractor hires there either.

The problem is that there is in fact not really enough money in the deal to pay for the services required. Whenever that happens in any business, stuff goes wrong. I do see your rents are decent, so that is going to help on that score.

You are also trying to have it both ways. You want to hire it out, and then you want to step in when you decide you can do it better.

This is what you signed up for my friend.

Now that you have 6-7 in Dallas, maybe you could afford 1 in your own back yard? You could be your own PM and take that piece for yourself. Like Thomas said, you either manage your own property or you manage the manager - take your pick.

Good luck in any case.

2 Reply

Twana RasoulBusiness Member

Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes

7y

@David Woz one of many mistakes I’ve made and learned from is how quickly to fire someone, especially a PM. Reach out to other investors that invest in that market and ask them about their pm...and hire a new one and fire your current one. If you are not happy and it doesn’t feel right then...

Best of luck!

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1 Reply

Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

7y

New lease fees are debateable, I pay $300, not 60% of lease, but that’s vegas. But $400 to renew is INSANE! My biggest pet peeve with current pm is $150 to renew. They email the tenant a 1 page form with the rates I gave them. Tenant says “I want this” and I get charged $150. You’re getting charged $400 for less than 10 minutes of work by a person making $20/hour?

So you're starting the year down $600, you need to charge an extra $50/mo just to cover the overages. That's $4k per year on 7 properties. Try a local REI or start a new post asking for DFW management company recommendations. In that big a market there has to be a couple decent ones.

1 Reply

Brad LarsenPro Member

Property Manager · San Antonio and Austin, TX · Member since 2016 · 377 posts · 380 votes

7y

@David Woz You make some valid points on the maintenance concerns, but I also think you may be expecting too much without a little bit of extra effort of understanding on what goes on in a PM company. I think you should bring these concerns up to the PM Company before looking to fire them. The grass is not always greener on the other side and I'm amazed at the advice people offer saying to just "fire them" without knowing the pain of doing that.

I wrote an article once about where landlords (owners) fall in regards to Property Managers to give you the other side of the coin. https://www.biggerpockets.com/forums/52/topics/402958-investors---are-you-a-c-class-landlord

2 Reply

Chuy Gonzalez

Investor · Long Beach, CA · Member since 2012 · 313 posts · 190 votes

7y

The only question is why haven't you gotten rid of your PM already? i was in a similar situation, and i let it go on for far too long, but the biggest problem with my PM was lame screening, lame tenants and lots of evictions. Everything falls apart with bad people. I looked at yelp for PM ratings. Cut them.

0 Reply

Angie Shires

Real Estate Broker · Tyler, TX · Member since 2018 · 193 posts · 143 votes

7y

@David Woz have you contacted the owner of the PM Company directly? They may have no clue that their property managers are unresponsive and not doing their job 100%. I would start there! As stated earlier, change companies and just change problems!

As far as the contractors, while it is their job to help with that...I'd have a list of preferred providers set aside to call for every repair imaginable. Let the PM know those are the providers you want to use and communicate with those contractors on a regular basis. Relationships are everything!

We teach people how to treat us, do your due diligence and maintain constant contact with your PM...they will learn quickly and won't want those accountability phone calls. On the other end, you must be active in your investments.

Good luck to you!

2 Reply

Mike Dymski

Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes

7y

60% lease up fees - Market dependent. I personally would never pay them but fees vary by market.
$395 renewal fee - My market does not have renewal fees. Seems high.
Microwave charge - Should be around $50/hour.
Leaky roof - Unfortunately, not all PMs are going to think about storm damage. They should have followed up on the roof replacement quote. For a roof replacement, they should receive a construction management fee.
Painting and make ready charges - Most PMs use dependable, bonded contractors and will not shop like you would.
Getting someone on the phone should not be challenging.
Getting someone after hours would be unusual.

3rd party management can be challenging in state...out of state just adds to the challenge. May have to shop around...and factor in inefficiencies into your financial projections. Good luck.

2 Reply

Shirley R.

Rental Property Investor · Hartford, CT · Member since 2018 · 81 posts · 73 votes

7y

@David Woz

Find a different PM for the new property. If they're better, give them the old property too.

From my experience with PM, they not only suggested the insurance cover the roof, they fought the insurance till it was paid too. A few years later they also got the same house completley resided by the insurance.

On the other hand, they charge a whole month for leasing...

2 Reply

Dave DeMarco

Rental Property Investor · Pittsboro, NC · Member since 2016 · 97 posts · 85 votes

7y

@David Woz Unfortunately these are very common issues with PM's. I highly recommend you manage your expectations with new management and heed @Shirley R.'s advise. You have enough properties to test a few PM's and get the right one. Split them between 2 or 3 PM's and see who suits your needs best. It will be a pain in the a** to manage 2 or 3 PM's but in the long run it will be worth it.

A good PM is worth their weight in gold.

1 Reply

David Woz

OP

Rental Property Investor · SF Bay Area, CA · Member since 2017 · 45 posts · 112 votes

7y

Originally posted by @Theresa Harris:

I admit I did smile when I read "Despite me asking them to get quotes and they ignored it. I ended up making a special trip out to inspect myself and purchased another property when I was out there.". I'm imagining your trip out to find another property manager may result in house #8.

I suspect you will be correct :)

0 Reply

Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

7y

@David Woz some of these are market dependent. In my market if you had those types of rents on the propeties you’re paying 8–10 percent monthly and I believe around half a month rent for new tenants. That’s it.

I think you’re overpaying and should find a new PM. If they had great customer service maybe you could justify it but you’re overpaying for bad service

1 Reply

David Woz

OP

Rental Property Investor · SF Bay Area, CA · Member since 2017 · 45 posts · 112 votes

7y

Originally posted by @Account Closed:

So, you expect the management company to run around and price shop every time for every repair? And you think how much is fair compensation for that? How much is your time worth per hour?

I would have my own contractors too if I ran a management company and if the owner wanted to go around and get their own quotes - be my guest. You are not getting a discount for that. I would also likely take a percentage of every repair too, including the ones where the homeowner insisted on the contractor. General contractors usually charge 20% and the client does not always get a say in who the contractor hires there either.

The problem is that there is in fact not really enough money in the deal to pay for the services required. Whenever that happens in any business, stuff goes wrong. I do see your rents are decent, so that is going to help on that score.

You are also trying to have it both ways. You want to hire it out, and then you want to step in when you decide you can do it better.

This is what you signed up for my friend.

Now that you have 6-7 in Dallas, maybe you could afford 1 in your own back yard? You could be your own PM and take that piece for yourself. Like Thomas said, you either manage your own property or you manage the manager - take your pick.

Good luck in any case.

I do expect them to keep to their word.. While I don't expect multiple bids, they claim to do "volume" with contractors and get volume pricing... I haven't found that to be true... Calling a reputable painter myself for instance has produced quotes literally half what they are charging me... In that case, two or three hours on the phone over a few days saved me over 2,000.00.

As my PM I expect them to push back on contractors on my behalf, not justify their nonsense... In the case of the microwave, I expect them to use common sense and push back against a bill like that.

3 Reply

David Woz

OP

Rental Property Investor · SF Bay Area, CA · Member since 2017 · 45 posts · 112 votes

7y

Originally posted by @Bill B.:

New lease fees are debateable, I pay $300, not 60% of lease, but that’s vegas. But $400 to renew is INSANE! My biggest pet peeve with current pm is $150 to renew. They email the tenant a 1 page form with the rates I gave them. Tenant says “I want this” and I get charged $150. You’re getting charged $400 for less than 10 minutes of work by a person making $20/hour?

So you're starting the year down $600, you need to charge an extra $50/mo just to cover the overages. That's $4k per year on 7 properties. Try a local REI or start a new post asking for DFW management company recommendations. In that big a market there has to be a couple decent ones.

Great to see real numbers of what others are paying... even if it isn't in my market. Very helpful! Thanks!

0 Reply

David Woz

OP

Rental Property Investor · SF Bay Area, CA · Member since 2017 · 45 posts · 112 votes

7y

Originally posted by @Chuy Gonzalez:

The only question is why haven't you gotten rid of your PM already? i was in a similar situation, and i let it go on for far too long, but the biggest problem with my PM was lame screening, lame tenants and lots of evictions. Everything falls apart with bad people. I looked at yelp for PM ratings. Cut them.

I guess I haven't let them go thus far for a few reasons...

It is a pain in the *** to switch.
They do actually get some things right. Never had an eviction with them... they do produce quality tenants. They are good with the bookkeeping and quick with their payments back to me... So, I do appreciate that and recognize those things are huge and they get that right.

After reading everyone's feedback, it is clear I need to look around...

0 Reply

David Woz

OP

Rental Property Investor · SF Bay Area, CA · Member since 2017 · 45 posts · 112 votes

7y

Originally posted by @Angie Shires:

@David Woz have you contacted the owner of the PM Company directly? They may have no clue that their property managers are unresponsive and not doing their job 100%. I would start there! As stated earlier, change companies and just change problems!

As far as the contractors, while it is their job to help with that...I'd have a list of preferred providers set aside to call for every repair imaginable. Let the PM know those are the providers you want to use and communicate with those contractors on a regular basis. Relationships are everything!

We teach people how to treat us, do your due diligence and maintain constant contact with your PM...they will learn quickly and won't want those accountability phone calls. On the other end, you must be active in your investments.

Good luck to you!

I never thought about having my own people for them to call first... I like it. Thanks!

0 Reply

David Woz

OP

Rental Property Investor · SF Bay Area, CA · Member since 2017 · 45 posts · 112 votes

7y

Originally posted by @Shirley R.:

@David Woz

Find a different PM for the new property. If they're better, give them the old property too.

From my experience with PM, they not only suggested the insurance cover the roof, they fought the insurance till it was paid too. A few years later they also got the same house completley resided by the insurance.

On the other hand, they charge a whole month for leasing...

This is exactly what I was thinking... I close on a new one this week and will be sending it somewhere else...

0 Reply

Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

7y

@David Woz

David, if they do find good tenants, can you ask if they offer that service ala carte?

I know several property managers separate that part of the business.

Have them find the tenants and then try managing them yourself.

I’ve only done this with one of my properties, the one in MN. I did it for a few reasons, the rent is my highest ($2700/mo) so the savings were healthy. The property manager (renters warehouse) didn’t arrange for repairs, they simply told you of a problem and gave you a list of some suppliers you could call and schedule yourself, it’s a townhome which is low maintenance, and I had a good rapport with the tenants and we’re on year 4 of a 7 year lease.

The employees at the Las Vegas pm keep me signed up for full service with them. They come through in the clutch even as I butch about release fees and the occasional high repair bill. (They also keep tenants informed to Hoa complaints and make sure they get take ]n care of.)

1 Reply

Ryan McKelvey

Jacksonville, NC · Member since 2018 · 67 posts · 58 votes

7y

@David Woz

Assuming what you are saying is 100% true. Get a new property manager. Total lack of communication.

Playing devil’s advocate. What does your PM Contract/Agreement stipulate as far as maintenance/repair limits?

0 Reply

IS it me, or my Property Manager?

IS it me, or my Property Manager?

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