Multiple property discounts from property managers

8 Replies

Does anyone have any advice for getting discounts from a property manager for multiple properties? I currently have a PM for one property and am considering using them for a second. Things have gone well, but I've only worked with them for a year and my tenants have been about as great as you can get, so I haven't been able to see if they're really good or not. My realtor owns a PM company and wants to manage my second property, but I'm not sure if I should jump ship yet. He mentioned seeing if my current PM would be willing to offer any incentives for managing more than one property, but I have no idea how to go about asking that. Is it normal to ask for the tenant placement fee (75% first month rent) waived? Monthly fees (currently $100/month) decreased for one or both of the properties? Are 2 single families not enough to ask for any of this? Any advice is much appreciated!!

Just being a customer is enough to negotiate. We marked up every page of the contracts our different property managers gave us, even ones we only have one home with. I'd come up with what you think is a reasonable fee structure and offer it to both the property managers (assuming your happy with your RE agent and are confident they are going to do a good job on the back end for you too). See who says what. My guess is your realtor will agree to get both the houses and your current PM will play harder and lose your business. Also, a great point for your realtor giving you lesser fees is that they have income from your home purchasing and future selling that provides them an additional income stream. Might mean free or extra service on one side or the other. I was referred an off market quit claim deal and my property manager/realtor refuses to invoice me for the agreed upon referral fee because they are going to see the money through their pm fees. Beware of the cheapest service, but don't be hesitant to negotiate for better value. Good luck.

@Todd Rasmussen this is extremely helpful, thank you. If the current tenant renews with the current PM (which they might), what would be proper etiquette to move this business away? Is it as simple as "I gave you the opportunity to keep my business but you couldn't compete" or is it best to keep working with them until this tenant is out?

What we do is charge 10% gross rent for one property. 8% for 2-4 properties and from there the rate has a little more wiggle room if we'll be managing 5+ properties (these are SFH and 2-4). If they're delivering a great service they might not budge though, I know I wouldn't.

@Erica Moore I wouldn't worry too much about etiquette involved in moving business away. Don't burn bridges, but don't buy friendships either. Check your contract with them. My guess is they've covered themselves for this instance and you have to buy out their lost management fees. At that point it's a subjective decision for you to make based on cost to leave and savings at your new place. If you're going to switch, I'd have your new PM get a letter to the tenant introducing themselves and asking about renewing before the lease runs out. Guessing again, but I think that would cost you several hundred dollars if your current PM gets lease renewed before the move....

Originally posted by @Erica Moore :

@Peter T. That's my worry - they'll say they've done this great job when in reality they haven't had to do anything yet! Thank you for some insight into the actual discounts

 That's a bit ignorant. You have no idea if they have had to do anything. Their job is to handle problems, not run to you to solve them. I don't tell my clients when a tenant calls me up hysterical because of a roommate situation, or when we have to make some small repairs, or when I saved them from getting a violation notice because tenants put out trash on the wrong day. You should be happy this investment is truly passive right now.  

@Peter T. They haven't shielded me from some of those things, so it's good to know that a great property manager is supposed to. I guess when I'm thinking of things they've had to deal with, it's something larger than violations, etc.