Real Estate Investor · Redondo Beach · Member since 2012 · 37 posts · 18 votes
I currently manage my own rentals now, but as I get more and eventually need to hire someone to help me, my plan is to start my own property management company and offer my services to other investors and landlords. I am still a ways away from this but want to get things started so when I do "go public" I have a sound business plan. So I know what I want in a property manager, but I am curious what others would want. I have always thought it is better to ask the customer what they want rather than sell them on what I want to give them.
Thoughts on fees, flat rates, percentages? ranges?
Use of your own vendors or ours (contractors, handymen)...
Accounting reports, which format, how frequently updated, available online, quicken, quickbooks, excel?
Available add on services, monthly maintenance inspections, monthly market reports
Repair limits without notification, what is your limit?
Evictions, prefer to pass on all costs plus a fee, or pay an additional fee monthly to handle outright....
Payment remittance to you after rent is collected, checks, online...
Any other features, benefits, items you would be interested in.
Commercial Landlord · Oshkosh, WI · Member since 2013 · 299 posts · 88 votes
13y
One thing I always cross off big X through, in the management contracts is they want a % if you sell building. I say Heck no if they want a % then they can get the listing from me first!
I go through with a fine tooth comb in the contract make sure you can cancel when you want to. Also make sure your not paying 30 bucks to screw in light bulbs in common areas and garbage fees like that.
Commercial Landlord · Oshkosh, WI · Member since 2013 · 299 posts · 88 votes
13y
I will do one party listing with them but thats always a separate deal and must be completely bifurcated from the management contract.
I have a tendency not to combine this activity of management and selling because its too intrusive to my style of ownership. Unless they are my employee;)
Orlando, FL · Member since 2013 · 22 posts · 2 votes
13y
I think a management company's greatest qualities are it's 1) customer service and 2) flexibility when offering services to landlords. I don't believe there is a one size fits all type of service although, there should be a baseline standard. The landlord should be able to tailor service to meet their needs. A local LL will have different needs from a LL who is out of state. When I purchased a duplex, I decided to keep the existing management company in place which may have been a mistake as I didn't spend much time checking out their reputation.
The monthly fee charged to LL seems to be 10% but this can and should be negotiated to a lower amount of 6-8% depending on the number of properties managed. Usually the tenant is saddled with income stream fees: i.e. $50/service request, pet fees, etc. Lawyer/eviction costs are passed onto the LL. Some companies charge LL's annual renewal fees, inspection fees, early termination fees with right to continue to collect a monthly % on tenants they find, fee this, fee that etc. Too many fees can get old very quickly.
MC's usually have a list of companies they regularly use. However, my previous MC company used a repair guy who did absolute shoddy work. The companies they used were lower priced but didn't always do the best job which then required me to spend more money addressing the same problem. I ended up taking over repairs which totally defeated the purpose of having a management company. A MC needs to ensure problems are properly resolved.
End of year statements like 1099 are standard. Income was usually direct deposited into my acct and a monthly summary mailed to me detailing monthly payment less any expenses/repairs/fees.
Repairs without my consent were capped at around $250, however, towards the end I took over the "management/maintenance" aspect due to negligence while the MC continue to provide bookkeeping.
I expect MC's to know the laws and legal rights of both tenant & landlord. Also, I expect a high emphasis on customer service to the tenant - most MC's aren't very thorough and can come off as bullys or very nonchalant when interacting with tenants which in turn can lead to a high tenant turnover rate rather than focusing on keeping everyone happy. After a certain point, if a management company has too many properties to oversee, the service will suffer. Or maybe they just suck for no reason.
Eventually, my old MC and I agreed to go our separate ways. I was doing most of the work anyway!