I have a SFR in Hillsboro area. The property is being managed by a property management company. For the most part, I am satisfied with their management: they have placed high-quality tenants who have paid rent on time, largely taken good care of the property. Lately, however, I am noticing with awe as property maintenance costs have escalated. Consider this:
In 2014, a paint touch up job used to cost us ~$300.00. Last year after a really bad tenant spell, we restored a lot of the property and repainted the whole house. Recently there was a tenant turnover and I received a bill of touch up (over a brand new paint). The cost = $800.00
I have also received several seemingly frivolous maintenance requests from the tenants. The property management company is more than happy to comply, and average service call has cost me over $300.00 no matter what the reason.
The property is aging, therefore there are a few failing parts, but that aspect notwithstanding, every job is costing us twice as much as what it used to cost historically, ~6 years back.
I am interested in hearing the experience of other landlords in the area: is PDX area really getting that expensive? Is tenants' mindset shifting? We used to have tenants who were handy and did a lot of small fixes themselves. Lately, we are seeing tenants who wish to treat the property like a resort room, where they will call maintenance to help them light the fireplace (this indeed has happened a number of times).
I also think that the property management company is involved in this to an extent. They are padding costs and increasing their margins from the maintenance calls (these maintenance calls are managed by their own staff, therefore they set the rates).
I would like to hear experiences of other landlords. (At this time, I am not thinking of switching my property manager therefore no solicitations please!)
@Medha Nanal so you are all over the map here. Touch up 800 on a brand new paint job? meh. "a few falling aparts" like what? fixing things that are falling apart isn't cheap. Saying costs have gone up since six years ago....well that isn't exactly surprising.
They are calling maintenance to light the fireplace--what was the response?
Padding costs--you are introducing this idea but there is no evidence for it. What are there rates.
Grumble, grumble....show us what you don't like
Well, managing a SFR does take time. When they quote you a fee that doesn't leave much wiggle room since it's pretty straight-forward that 12% (or whatever fee) of gross is calculable.
So, a lot of prop mgrs will use maint as a profit center (ie charge you $75/hour and pay a guy $20/hour to do it).
If that is an issue, if you've got long-term tenants, how about self-mgmt?
Ok, John -- yes definitely I am trying to validate a conjecture here. Either costs have gone up OR property management company is getting expensive. And I do not think I should celebrate either, therefore grumble grumble :-)
Costs going up over six years was not my complaint. Cost more than doubling over six years definitely is a cause to concern to me. Is it not to you? I am asking around whether others have seen a similar percent hike.
To answer some questions you raised, in the hope of turning this into a more helpful discussion:
-- From your response, it appears like you think that $800 for a paint touch up is nothing to worry about. Ok, helpful perspective. Thanks. I would like others to chime in though.
-- For the fireplace maintenance, the service was provided by the property manager, because fireplace was advertised as a feature and had to be supported (their justification). They claimed that they tried educating the renters on how to do this, yet continued receiving calls each Fall as soon as the weather turned cooler.
Overall, for the purpose of ongoing discussion, let me clarify the question a bit:
How much have operating costs gone up for a landlord in Portland metro area?
Corollary: if you were to see a 2.5x hike, what would your course of action be?
Have you noticed a shift in renter's mindset lately who is renting a SFR, especially a good area and high rent subdivision?
@Steve Morris , I can understand that they are operating a business, therefore will have margins of profitability.
What I find shocking is a practice of hiking the costs in what appears to be an opportunistic fashion. I know it's capitalism etc.
Self-managing is not an option I am considering at this time, however, switching to another company is something I may consider in an extreme case. As I said earlier, this would be my last resort, if it comes to light that this price hike is being managed deliberately with a goal to milk our relationship as much as possible. Much of why I am surveying others' experiences is to find out how others' experiences have been.
Well, you can always tell them that if it is >$500 (for example), get 3 quotes or tell you so you can do quotes.
I think any given tenant is allowed one chance to get shown how to light the fireplace on your dime. That could have/should have been done at move in, and perhaps was. Now you know to give the management company a check list of things you want reviewed in person at the time of move in. The second time, and being invoiced for it on your bill, seems a bit tacky. Did the tenant not understand the instructions the first time? What did you pay for that?
I'd suggest that you tell the management company to 1) call you to discuss and approve any expense over $200 and 2) Charge the tenant for the service call if they continue to have confusion over the issue. This can be done kindly and gently, and will like prod the tenant to remember the procedure instead of haphazardly calling for assistance. The tenant probably has no idea that there was a fee for that. They tend to think there's a handyman roving around waiting to work on the Property Managers houses.
@JJ P. -- thank you for sharing.
I mentioned the fireplace issue as an example of frivolous maintenance requests. Though we did not immediately pull the plug on servicing them, in the following lease contracts we made the fireplace a decorative item only, so we would not be responsible for service calls for its maintenance and lighting up. Now the tenants can still hang stockings during Xmas, but cannot light the fireplace. The house has a gas heater, therefore they are not exactly suffering without a fireplace. But this was one example.
I hear you, that the key is to manage the property manager closely. I do have a condition to get an approval from me on *every* maintenance request, anything over $0.00. Also, I am a remote landlord, live too far to drive down to the property to check it out, and therefore the PM is my ears and eyes. Although they are very professional, perform decent quality repairs, and place upper middle-class tenants who always pay rent on time, take good care of the property (except one, who had a special situation but as a result destroyed the property, BUT paid rents on time, always, and paid the damages too. But that story is for another day!)
What I am noticing, however, is that there is a steady stream of maintenance requests. (This property has been rented since 11 years and the past 4-5 years, ever since the frivolous cannot-light-the-fireplace type tenants who are now gone, the frequency of maintenance requests has gone up.) These days, most maintenance requests sound less frivolous than that, but I am always left to wonder what the tenants might be doing to cause the problem to happen! The PM assures me that the tenants are "stellar" -- so what gives? I myself live in a 70+-year old house, and I never have refrigerators randomly leaking water, or dishwasher door suddenly stopping to close, unless I mess up.
The only way for me to ascertain that this is "normal" is by asking around other landlords' experiences, especially those who are in similar situations to mine. That is the reason for my original post. Thank you all who contributed so far, your insights were helpful.
P.S. I must also say, there is a big shortage of good property managers in the PDX area. A couple of years back, my PM company (the same company) had one manager manage my geography and the person was doing a poor job, therefore I tried to interview two other companies who came highly recommended by others. My experience was dismal. One person made a time to speak with me and did not turn up. The other connected, we discussed our situation, she gave me her usual sales pitch, and she did seem knowledgeable about property matters in general, and then I never heard back from this person. It was mind boggling, that their business was so good that they were able to turn down a hot property in a hot market! Anyway. Hopefully my experience was non-standard, and hopefully there are dedicated and honest companies still in business. Thanks for reading!!