Hi everyone, I could use BP's advice. My PM charges me crazy fees for everything. For example, the furnace crapped out, and he arranged to have it replaced (which is fine) but also charged me $200 for bringing 2 heaters to my tenants for 3 days. Earlier on, he charged me $220 to have a simple lock replaced. That's on top of the 10% fees. I get it that this is their business but to me this is death by a thousand cuts. Can someone give me a reality check on what I should be expecting in terms of actual PM spend and whether such high prices are within the range of normal? This is in Indianapolis.
Many thanks in advance!
I am not sure what the market cost is like in Indianapolis but $200 to bring by two heaters and then $220 for a new deadbolt seems excessive.
I would just ask for a cost breakdown for each. Find out what kind of labor rate and time is being charged to make up that $200 heater drop off and then a break down of time and material costs for the new lock. If they are unwilling or unable to tell you that then that is a red flag.
Also, call around to some other property management companies in your area and see what they would charge. You may end up finding a better company to manage your properties.
The reality is that you should expect what you agreed to. What does your management agreement say? The property manager should disclose any and all fees up front. If they intend to charge you a trip charge every time they visit the property, that should be disclosed. If he's charging "equipment rental fee" for the space heaters, that should be disclosed.
A standard doorknob costs $30 and less than one hour of labor to install, $60 - $75 tops. But what if you have an industrial doorknob and it needs to be keyed to a master key system? That requires a $75 door handle and a locksmith at $60 an hour to install and re-key.
We can't tell if these charges are outrageous unless you provide us all the details. You need to read the management agreement you signed, communicate with your property manager, and see if he's abiding by the agreement or not. There's a very good chance you signed something without understanding it.
As @Nathan G. pointed out. Go back and READ that agreement. For example, my PM does not charge me a markup fee for maintenance, but they keep any discounts their vendors give them to do work. In other words I am still paying full price for any work that needs to be done. They also give me full invoices for every charge in detail.
My property is also in Indianapolis feel free to reach and I can suggest my PM.
It seems maintenance expenses causes the most frustration from landlords. Ask them to provide an explanation and schedule of value.
Perhaps moving forward you can clarify with them their estimated cost and then determine if you want to self-manage and save the money. This could have applied to the locksmith, probably not the space heaters.
While you are in this state of mind, I would have a conversation with them again to fully explain all their maintenance fee structure. That will educate you and prevent frustration the next time an issue occurs.
The locksmith fee looks to be high. In our area a rekey with 6 locks is $89. UNless there is no key and he needs to create one, then it's more. Bringing space heaters for $200 includes the rental fo the space heaters, so this seems fair. It beats paying for a hotle for 3 days if it is that cold out. Seemed like a good solution and also kept the tenants in the home andhappy leading to longer tenancy for you :)
Ask for a breakdown. Also ask if you are able to use “your own contractor”..... I found out the hard way that when a PM also has their own in house maintenance staff then this is something that comes with the business...... Then I fired them.
1. The PM should have a threshold dollar amount for which anything at or above that amount, they get your approval first before proceeding. For example, my PM has a $400 threshold. Anything below $400 they take care of automatically. Anything above $400, they call and get my approval first. The exception, of course, is emergencies that effect the Tenant’s living conditions, like when the A/C stopped working in August at one of the Houston properties.
2. The PM should have a flat percentage or fee that they charge for maintenance and repairs. A reasonable amount in my experience is 10-15%. For example, if the cost of a plumbing repair is $100, then the PM would charge you a 15% fee, or $15, in addition to the $100 repair cost.
But as everyone has said, it now just depends on what your PM contracts says.
As others have pointed out, I would check your management agreement to see what it says about how you are charged for labor and materials for something like a lock change. For example, our firm charges at rate of $40 per hour plus materials. We have minimum of 1/2 hour ( $20 ) and our owners always get the receipt for materials and a breakdown of the techs time while he was at the property and the work performed.
If your PM does not have a transparent system in place, that is a big red flag for you. We have inherited many clients that have left other firms for sneaky maintenance charges.
One the other hand, My PM charges no monthly fees and does that type of work for free. However, he takes excessive time for coffee and reading in the morning, shows up whenever he wants, takes long lunch breaks, takes twice as long as a competent handy man, quits early and frequently takes multi-day vacations without notice. During the women's world cup, I even caught him drinking bear and watching TV during the afternoons when he should have been working. I can give you his contact info if you like.