Property Management outside of my area needed
Member since 2022 · 1 post · 1 vote
Property Management outside of my area needed
Most Popular Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votesEven if someone give you a referral, what meets their expectations, may not meet yours.
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.
We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
Please send us any feedback via email, as we do not use the DM feature here.
Logical Property Management4.9451 Reviews
4 Replies
- 3yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Even if someone give you a referral, what meets their expectations, may not meet yours.
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.
We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
Please send us any feedback via email, as we do not use the DM feature here.
Logical Property Management4.9451 Reviews - Lender · San Diego, CA · Member since 2022 · 587 posts · 298 votes3y
Welcome to the BP community, Wil! Would love to offer insight where I can, and connect.
- Real Estate Broker · Cleveland, OH · Member since 2019 · 25 posts · 55 votes3y
Quote from @Drew Sygit:
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator
Hi, Wil...
@Drew Sygit comments are spot on. I am a "nano" broker in the Cleveland market, and provide property management services to a captive set of client/investors in this market (I am not soliciting your business). There is a saying in the real estate business that you don't know if you have a bad Realtor until it's too late - same with property management. I just inherited a property owned by a foreign investor who had a national brand property management company. He has close to $3,000 in unpaid water/sewer bills, a stolen furnace, and no insurance, a property he owned for three years and had exactly two tenants, one for two months, the other for six(but paid only three months) and now has a dilapidated property that he's going to sell at about a $30k loss.The best advice I can give you is this: Being an out-of-state investor, you obviously have to rely on local property management. Please take the following to heart:
1. Ohio law requires that property management be conducted by a licensed real estate broker and that property management services are provided by a licensed real estate agent. Make sure of both.
2. As @Drew Sygit mentioned, get copies of several contracts and make sure they cover the services you will need. Have an attorney review them and do not be afraid to negotiate terms and conditions - even using one contract to extract concessions from another.
3. Make SURE that you have a target tenant in mind and that the property manager knows what that tenant type is. Most property management contracts put the tenant selection process in the hands of the property manager and can easily leave you out of the process. If that is what you want, OK, but in my opinion, it's your ***(et) so you certainly have the right to review tenant applications. The ideal situation for a property manager is having a tenant that comes to them without representation the day after a property is listed. They have no time invested in showing and get to collect 100% of the commission. That is a recipe for disaster.
4. QUESTION EVERYTHING that the property manager tells you! Verify invoices, expenses, charges, etc. It is very common for property management contracts to charge for every and any service they provide - which is OK, if they provide the service. But nickels and dimes add up to a lot of profit, so it's easy to start stuffing bills with services that were not rendered or ineffectually so.
good luck!
- Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes3y
Quote from @Wil Townsend:
Hello to everyone and let me say as a first-time home buyer it is so exciting being a part of this community. I'm about to purchase my first investment home and looking for a property management company in the Cleveland OH and PA area. Is there anyone that lead me in the proper direction?
Hi Wil, welcome to the BiggerPockets community! I have a list of PM's, contractors and lenders that have helped several of my investors when acquiring properties. I personally have 8+ units in Cleveland and my team primarily helped me to make the managing of these properties easier. Let's connect and discuss how I can help you out.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.