My Owner Building Portfolio, Asks Me for a 3% Discount off PM fee
We have worked hard to build our relationships over time, with owners and investors, and we are even expanding. We have done this by evaluating workload, and setting fair Property Management rates with our owners, on a case by case basis. We treat them all as equally as possible, but realize some are very high maintenance, and others, sadly, have taken advantage of us, asking low rates to begin with, as they build, and then we make them a lot of money, only to ask us to lower our rates, so they can earn more by saving on our cost, since we are to them, essentially, overhead. I have been working with a certain client for 5 years now. We started out leasing for them only, and he and his family self-managed. Then, tenant issues started arising where they were wanting maintenance done, it was promised and not completed, etc.. so we showed him the benefit of professional management. We set a very fair rate, and have managed 3 of his properties. Now, he is buying 3 more properties, and I already have 2 of them pre-leased at an excellent rental rate with qualified, impeccable tenants. Now, he has asked us to lower our rates by 3% so that he can save money, because it is tight for him, as he is buying up. He is a very well respected, very kind and thoughtful individual, so I was surprised at this. I felt that he did not value our services and asked if we had not provided them well enough. He was very pleased with us, but was strictly looking at savings, and said he and his wife and grown son could do the maintenance themselves, and save that money. He has also asked us for all the security deposits to be sent to him to put into a trust - which takes our compliance into a worrying level, so we are going to have him sign a statement that he is responsible for them. I understand his perspective, but as a PM business, will the stance of "some money is better than zero money" going to diminish all the extra and above things we do for him, and devalue our business? Or should we remain solid in staying at our current rate. We have not raised rates on any owners in the past 3 years, in order to keep them. Thank you in advance for your thoughts.