Flipper · Fayetteville, NC · Member since 2017 · 8 posts · 2 votes
Hey ladies and gents,
I recently move from my old home and decided to rent it out to pay down the mortgage. My wife was a real estate agent so we used her old firm. I spend close to $6500 before signing an agreement with them to fix any issues and the year before I spend 12k on the exterior. On top of this we lived in the property for 5 years with minimal issues. Just the normal HVAC once or twice a year. Long story short the property is in excellent condition.
I do understand that there is some growing pains to be expected with any new tenant, however, 13 service requests in 6 weeks seems to be a bit excessive. One request was for a screen coming out of a window...
Should I find a better management company or just go it alone? I never received a signed contract from the management firm, so I’m sure I can get out of it easily. I can’t afford to pay $600-800 a month in service calls a month, which is what they’ve been averaging.
Rental Property Investor · East Longmeadow, MA · Member since 2019 · 154 posts · 64 votes
6y
I would have signed an agreement and know the terms before any money leaves the bank account. Screen the tenant using BP or other real estate podcast tips and advice. Get a solid lease, I do like the one BP provided with the Pro Membership (not advertising). Usually can have a personal relationship with a handy man, and have the calls go directly to him. Just starting out with rentals I am not sure if a Property Manager is necessarily needed (unless living far away). What are some of the service calls about? I would just have the tenant make a list for you. Do your best to fix it. A happy tenant is the way to go. Good luck and I hope this helps.
Attorney · Akron, OH · Member since 2016 · 535 posts · 389 votes
6y
@Bryan Creed
The problem with many management companies is that they have a conflict of interest when it comes to service calls. Up-charging the cost of servicing the property is how they crowbar money out of you, so they aren't going to be inclined to tell a tenant "no."
You're bound to have a similar experience when turnover time approaches. They will go through the property and upgrade it as much as humanly possible so they can get those up-charges.
Given that context, you ought to verify whether they are real service calls or whether they are something you could consider as inflated business for the benefit of the management company.
Then, you also need to consider the tenant. Maybe they are too picky. From experience, I have no issue telling a tenant no. They understand the property is rented "as-is" and understand that if they break something, they buy it. There aren't any superfluous upgrades to the property under the guise of fixing something.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
6y
@Bryan Creed A lot of the things on this list could have been tested and verified as functional during a quick sweep of the home before the tenant moved in. Was there one done by the PM? If not, I would have them start doing it because it is causing you some serious money. Almost all of this could have been avoided.
I recently move from my old home and decided to rent it out to pay down the mortgage. My wife was a real estate agent so we used her old firm. I spend close to $6500 before signing an agreement with them to fix any issues and the year before I spend 12k on the exterior. On top of this we lived in the property for 5 years with minimal issues. Just the normal HVAC once or twice a year. Long story short the property is in excellent condition.
I do understand that there is some growing pains to be expected with any new tenant, however, 13 service requests in 6 weeks seems to be a bit excessive. One request was for a screen coming out of a window...
Should I find a better management company or just go it alone? I never received a signed contract from the management firm, so I’m sure I can get out of it easily. I can’t afford to pay $600-800 a month in service calls a month, which is what they’ve been averaging.
Any advice would be greatly appreciated.
Bryan
I'm not sure how your lease reads. In Texas, ours is an "as-is" rental, and we give the tenant two days to get back to us on any repairs needed. After that, it's as-is. I suspect many if not most of your repair requests are items that have been there since they moved in. They call you as they spot these "issues".
Secondly, this is why I don't like management companies. The management companies I've talked to make a small profit on repairs needed. So there's an incentive for them to have higher repair costs.
Have you considered self-management? If not, please do. You'll save money. You'll be in control. You having a financial interest, your costs will go down.
No offense to all the good people in property management here.
Investor · Cleveland, OH · Member since 2017 · 319 posts · 330 votes
6y
This is why some people charge tenants a fee for service calls... although it would have to be in the lease.
I'd tell the PM to run them by you from now on, and / or get a new PM. From the charges, it looks like they are billing you 100 bucks every time they go out there. That would be ok maybe (still kinda high), but by now they know that these calls have almost all been frivolous, and keep going.
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
6y
Hi Bryan,
All but 1,2 and 3 would probably get handled in a larger multi-family complex (by a maintenance tech on staff) as part of business as usual (with a "sorry for the inconvenience" and a smile).
5,6 and 7 would probably get the same treatment plus an explanation on how to use the items.
Should you do this? It all depends on how you want to run your business.
1. Trimming a tree that didn’t need it (declined) $0
2. Remove a palm tree (declined) $0
3. Replace an old screen door. (Didn’t do) $106
4. Install Carbon monoxide detector (I put one in) $100
5. Microwave didn’t work (it works fine) $100
6. Stove didn’t work (it works fine) $100
7. Attic fan (nothing wrong) $133
8. Toilet occasionally would run (fixed) $133
9. Frig leaking (most recent not done yet) $133
10. Doorbell not working (fixed) $133
11. Faulty outdoor switch they were told about during pre move in inspection. (Fixed) $133
12. Window screen
13. Can’t remember this one but I’m sure I paid for it.
Something is up with the numbers. Why are so many $100 and $133??? A carbon monoxide detector is not $100. I'd tell the tenants that they are clearly not happy and they can get out of the lease and find a new place to live as of Nov 1. Then I'd start managing the place yourself.
1. Trimming a tree that didn’t need it (declined) $0
2. Remove a palm tree (declined) $0
3. Replace an old screen door. (Didn’t do) $106
4. Install Carbon monoxide detector (I put one in) $100
5. Microwave didn’t work (it works fine) $100
6. Stove didn’t work (it works fine) $100
7. Attic fan (nothing wrong) $133
8. Toilet occasionally would run (fixed) $133
9. Frig leaking (most recent not done yet) $133
10. Doorbell not working (fixed) $133
11. Faulty outdoor switch they were told about during pre move in inspection. (Fixed) $133
12. Window screen
13. Can’t remember this one but I’m sure I paid for it.
Something is up with the numbers. Why are so many $100 and $133??? A carbon monoxide detector is not $100. I'd tell the tenants that they are clearly not happy and they can get out of the lease and find a new place to live as of Nov 1. Then I'd start managing the place yourself.
Agreed. Every item is $133????
Carbon monoxide detector is 40 bucks tops and you can just plug it in. No labor charge.
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
6y
Now when that management company is handling 300 different units and you add it all up . Thats damn good money . They get you on cheap management fees and make it up on the little things . Nice little business
Investor · Austell, FL · Member since 2014 · 110 posts · 19 votes
6y
@Bryan Creed I may be biased because I am a property manager myself, but it sounds like the management company is being thrown under the bus prematurely. That may be justified, however, I personally would withhold judgement until I got more information.
A tenant can enter a thousand service requests if they want to, but that doesn’t necessarily mean any of them are legitimate nor does it necessarily mean that the property manager is fault.
We recently had a tenant enter about 20 work orders in a two week period; 95% of them were either minor upgrade requests or legitimate issues that weren’t issues at the time of the move-in, funny enough, a running toilet was one of them. I had a conversation with the landlord about what was going on and he happily went with all of my suggestions without a problem.
If you’ve had a conversation with the management company and they simply botched everything up, that be one thing, but I haven’t seen enough evidence based on your post to say that is necessary the case.
Rental Property Investor · East Longmeadow, MA · Member since 2019 · 154 posts · 64 votes
6y
@Michael Noto what he said is right. On some lease forms make a copy of an eval sheet when the tenant walks the property to have the items listed and fixed before they move in or when you get the property. Rent or other prices can be negotiated upon review of the evaluation sheet. In addition, some clauses in the lease say tenant is responsible for xyz, and if it falls under said clause it is the tenants responsibility.
Property Manager · Cleveland, OH · Member since 2019 · 446 posts · 566 votes
6y
There are some serious red flags with your particular PM company based on what you've described; no signed contract and the charges you are showing make it seem like they made separate trips for each complaint, many of which are deemed frivolous.
I don't think you need to necessarily self-manage, unless you feel like you are truly up for it and have the resources and the procedures yourself. But you do probably need to find a new PM ASAP.
Start vetting PMs in your area, compare contracts and ask them specifically how they handle maintenance requests. What is the maintenance limit, what kind of inspections do they do and what's included, how do they handle multiple work orders or ensure efficiency. Is there a monthly cap? Etc.
Flipper · Fayetteville, NC · Member since 2017 · 8 posts · 2 votes
6y
Update*
I made an attempt to work things out with them. I asked them to be included in the discussion as far as repairs go and I was basically told no. So, we’ve agreed to terminate. Since I’ve already got a network of vendors in the fayetteville area (I’m an experienced flipper) I don’t see it being an issue for me to self manage. These should end up being a win win for both myself and the tenant.
You’re right there were some red flags. There isn’t a cap on repair requests. Basically the tenants can put in for whatever they want. I don’t mind fixing everything, but there’s a much more efficient way to do it then sending out a separate vendor for every repair.
I made an attempt to work things out with them. I asked them to be included in the discussion as far as repairs go and I was basically told no. So, we’ve agreed to terminate. Since I’ve already got a network of vendors in the fayetteville area (I’m an experienced flipper) I don’t see it being an issue for me to self manage. These should end up being a win win for both myself and the tenant.
I'm glad you were able to find a solution. Hope the transition goes smoothly.
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
6y
@Bryan Creed you mainly need a new property management company. For all that stuff that isn’t a safety issue, I’d just tell the tenant you’ll take care of it (what actually needs it) when you do your quarterly or bi-annual inspection
Property Manager · Ketchum, ID · Member since 2016 · 277 posts · 132 votes
6y
It sounds to me like you have no documentation from your management company at all. You were not given a contract and you don't have copies of the lease agreement. Yet you are getting many requests. Is there a move in inspection signed by both the acting manager and the tenant? I think it sounds like someone is taking advantage of you. I would request an immediate meeting with the property management company and ask to see these docs as well as your contract with them. Make copies of what you get. If you did not sign a contract, you can fire them immediately. You will need copies of the lease agreement and you need to gain possession of the security deposit. Now find a good property management software that works for you. With one unit it should cost around $15 to $20 per month. Automate your rent collection and you will be set. I recommend that you meet with the tenant and do an inspection of the premises. Make notes as to the condition for comparison with the document on move in that you got from the PM. If there was no move in inspection done, you must take this step. If there is no instruction regarding maintenance management in the lease then you can add an addendum that includes that instruction and have the tenant sign the amendment. It becomes part of the lease agreement. Explain that you expect them to replace their own light bulbs, show them how to reattach window screens and how to change furnace filters. You can provide a new furnace filter yearly for them to install. That will certainly solve your problem and maybe get you a happier tenant as well.