Is my property manager ripping me off !!!!!!

General Landlording & Rental Properties
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Is my property manager ripping me off !!!!!!

Account Closed
Rental Property Investor · Tampa, FL · Member since 2018 · 15 posts · 10 votes

Hi Fellow BP’s 

           I have struggled with the following question for the past two years  I’m I getting ripped off by my property manager. I purchased 6 rental properties a few states away three years ago and I have never made any cash flow. Not even enough to take my self to a nice dinner. A little back ground I have 6 single family homes all but one have been remodeled from head to toe. I thought the issue was my property Manager so I switched Property managers and things where great for a few months. I had a call with the PM and he asked how was his company performing and I replied great and told him the issues I was having with my previous PRoperty manager . Then the issues started right after the call.  The properties are paid off except two one payment is 341 and the other is a Heloc 590. The Taxes range from 900 to 1100 for each and insurance is 500 per year per house. I tried to give people the benefit of the doubt, but I can’t figure why I’m not cash flowing is it that I’m doing something wrong, the un luckiest person in the world or getting taken for a ride. Here we are going into June and I-Have replaced 2 ac units 6,000 (replace 5 units in the past yr) pest control 400, electric socket reworked 600 and water heater 925  and roof patch work to name a few. I have requested pictures and receipts but they do not respond.


thank you for your responses in advance. 

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Patricia Steiner
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
5y

Before hiring a PM, have a contractor and/or handyman walk the properties and do an inspection checklist.  The checklists are available online for free.  The condition of the property along with photos establish the starting point - along with the age of the components (AC, roof, water heater).  This provides you with the knowledge and control you need to gauge maintenance and replacement requests.  It's also important to know how PMs make their money; a percentage of the rent will ensure they starve so it comes down to late fees and "upcharging" for maintenance requests.  So did the AC really need replacing or could it have been repaired?  Did they get multiple bids to present to you?  Did they put in a window AC/or portable AC to keep the tenants cool while options were considered versus calling in the first available at the "emergency pricing?"

Landlords/owners see the PM as their path to "passive ownership." The truth is the PM is suppose to manage your properties but you have to manage the PM.  Expect more of yourself first.  Know your properties. Stop now and do an inspection.  And, then expect more of your PM.  You'll be able to gauge very quickly whether you're being taken for a ride or not.  

There are a lot of ways to manage out-of-market/state properties; the PM model may not be the most efficient.

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  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    Sounds like you're likely getting ripped off. One if the hazards of long distance investing.

    1Reply
  • Brian Brown
    Flipper/Rehabber · Okeechobee, FL · Member since 2020 · 41 posts · 8 votes
    5y

    @Patricia Steiner - Hi Patricia you mention that there are many ways to manage out of market/state properties other than PM's. Being a newb what other ways do you use or are out there. This is my biggest fear/obstacle I'm trying to wrap my head around is trusting others to tell you and give you the truth about a property so not to get screwed. Thank You for any advice.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    @Account Closed this has been going on for three years????

    1. Your PM is not a professional. A decent PM will send you an itemized statement every single month, without fail, detailing the income and expenses. You could review that statement and know when your tenant paid rent, how much they paid, any maintenance done on the property, how much your PM charged, etc. You would also receive a 1099 and an annual statement every January that shows the performance for the previous year. All of these tools are basic and should give help you identify any problems.

    2. You are not good at managing your property manager. It's been three years and you don't even know what's happening with your properties. Your properties are either complete crap and repairs are eating up all your income for three years straight, or you are being robbed blind. I believe it's the latter.

    My recommendation is for you to contact the Property Manager and tell them you need to sell every single property. Find a good REALTOR that can get the homes listed and sold. If able, find a REALTOR that is familiar with real estate investments because they will be able to investigate what's going on with your properties and determine if you've been cheated by your PM or if you were cheated when you bought the property. Get these things sold. Invest in a nice mutual fund with a national broker that can be trusted.

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