Property Mgmt company getting greedy?

Question

I've own a duplex in the Sunnyslope area of Phoenix since 2016. Purchased for 99K. Both units rent for around $1,200 each. This summer, I considered selling it and had it on the market for 2 months (looking back I think we priced it way too high at $400K, but my relator insisted places were selling over $200K a door). We had a tenant move out in August, so we renovated that unit and kept it open to show potential buyers. After 2 months of no offers, I asked them to pull it off the market and re-rent. It's now sat empty for 3 months and the Property Management company keeps telling me that it's priced appropriately and they're just not getting qualified applicants. Any time I ask for metrics (how many emails expressing interest did you get, how many applicants, how many viewings did you do) I don't get full answers. They're now coming back and saying I need to spend more to spruce up the landscaping. I'm starting to feel like I'm being played.

Question to others in Phoenix. Is it a really slow market right now for renters / buyers? Comparable units do look a bit nicer but I'm priced under what they're asking for. So I'm not sure if I'm the one being unrealistic or if they see ME as the cash cow.

Question to others in Phoenix.  Is it a really slow market right now for renters / buyers?  Comparable units do look a bit nicer but I'm priced under what they're asking for. So I'm not sure if I'm the one being unrealistic or if they see ME as the cash cow.

Michael Smythe · Answer

Just went on Zillow and counted 49 of 739 rental listings in Sunnyslope are at least 90 days old.

That's only around 7%, but seems to be rising.

This is also the worst time of the year to have a vacancy.

Theresa Harris · Answer

I'd do two things-borrow a friend's phone and call to set up a showing and see what the response it.  I'd also start looking around for other PM.  If it was just renovated, it shouldn't sit vacant for 3 months.

Also have you walked through the place to see what was done?  If you do more renos, I would take care of them yourself (ie hire your own people) if you are worried about your PM using their people to make money off renos at your expense.

V.G Jason · Answer

After 3 weeks you need to ask how many inquiries, not 3 months.

If it's average amount, you stand pat. If it's below average, you drop rent. Also look at rentals nearby, see how long they're sitting and how that compares to yours. And right now everything is slow, super low housing market, this is not the time renters prefer to move, etc. This is going into thanksgiving and christmas, it always gets slow now it's all seasonality.

I don't think your being played, I just think they want it all at higher levels to justify the next one being at higher levels. Ultimately, you both win if it's at a higher level. They don't have a mortgage to service, so they have a different angle. You need to be more proactive on it. The landscaping will help, but won't materially change things if inquiries are low. I would pursue another PM company or give them a firm talking to about how active you want to be in it and how they need to respond.

Russell Brazil · Answer

Im unclear what you exactly view as greedy? They make zero while it sits vacant. Most people accusing a PM of being greedy would do so because they priced the rental too low so they can get paid quicker.

Colleen F. · Answer

@Kimberly Keesler what are you next to with that falling down fence? not sure if that is part of your issue. Is that an area where grass is usual.  I do see you allow dogs so I would ask them to highlight that in the ad.   I actually don't know that area of phoenix but that was what I saw in your ad. I would do something to improve the fence side.   I usually see stats on zillow so they should be at least able to tell you zillow leads. I would also ask where else it is listed to see if there is an issue with advertising across enough platforms.

Kimberly Keesler · Answer

This is my rental /the link to their advertisement:

https://www.zillow.com/b/9632-n-12th-ave-phoenix-az-9TVc9X/

I'm an out of state investor but will be spending 3 weeks in Phoenix in December, so that way my plan.  To go check out the property in person and see if all the updates they charged me for were done, to see how it really looks in person, etc.  I'm worried the updates we did weren't good enough, and maybe I need to do a complete overhaul to justify the rent.  But I'd also like to drive the neighborhood as every time I go back it looks like it's improving.

Lisa Hammond · Answer

The market is dead dead dead until late Jan-Feb. We will have a few stragglers get rented during this slow winter season but we noticed an immediate HALT to rentals much earlier than normal this year, about September actually. Lower the rent, offer move in specials, etc. That's the strategy we use to keep them moving in the winter.

Julien J. · Answer

@Kimberly Keesler

- I'd start secret shopping them to assess the PM performance: call, set a up a showing, apply for residency, and check out the listing marketing.

- Start shopping a new PM and inquire about the market.

- Double check the rent and pricing strategies of your market via the usual sites: zillow, redfin, apartment.com, facebook, etc.

Michael Smythe · Answer

Your Zillow link says the property is off the market and there is only a front pic.

Is this your duplex also (still off the market):https://www.zillow.com/homedetails/9632-N-12th-Ave-2-Phoenix...

Suggestions:Pics could be labeled with what the room/view isThe light over the kitchen sink looks crappy, try something with some pizzaz.Kitchen cabinets could use knobs or pullsPersonally hate fluorescent lights, suggest replacing kitchen light with LEDPic 8 shows unused drape mounts that should be removedShouldn't the plug by the bathroom sink be GFCI?Wooden fence looks crappyNo idea what's standard for AZ backyards, but it doesn't look good

Walter Moneypenny · Answer

Typically the 4th quarter is the slowest time of the year for long term rentals. I am a Realtor and have been in the North Central area of Phoenix for almost 20 years and have been doing sales / purchases and rentals in the area for the last 4. I have done several rentals in Sunnyslope.  Days on market have been increasing since the late summer and now are about the longest they have been in several years.

The Phoenix rental market has cooled and different strategies need to be used to get the property rented. If you are holding out for a particular amount for the rental, you need to consider your vacancy costs. Sitting vacant for 3 months could cost you $3,600 at $1,200 per month. A price drop of even $50 per month may cost you $600 in yearly rent, but it's better than sitting vacant for one more month.

I don't see where the PM company would be using you as a cash cow. Most PM companies do not make any money if the property is vacant. I would recommend interviewing some companies to get their take on the property and the market for that particular area.

Property Mgmt company getting greedy?

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