Taking Property Managers Advice with a Grain of Salt...
I'm currently interviewing a few local (Dallas / DFW) property managers. Some have been very helpful with providing feedback on certain neighborhoods / areas. However, I can't help but wonder if they are slightly biased towards more expensive (stable) properties, since they are presumably less maintainance (ie a $150K SFR in Plano, TX vs $45K in Irving, TX). I've thrown out a few areas around Dallas, but I'm finding that all of them are coming back as 'bad investments'. I have to think the people investing in these areas are still generating cash-flow though.
I have a trmendous respect for property managers out there...I have no doubt that these property managers have way more experience with these areas. I'm just trying to figure out how seriously I should take the advice on a 'less than stable' (but higher cash-flow) neighborhood. Has anyone had any experience with this?
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@Jason Haynes I actually charge a sliding scale for property management. The percentage goes down as the rent goes up. I'm not going to charge the $1400 rental the same percentage as the $800 rental because the $800 rental requires more work.
Most of my SFR rentals are in the $1400-$2000 range. I do have a couple of sub-$1000 doors, and I've been seriously considering adopting a policy of turning that business down in the future because they require more work than the income is worth.
On the sales side, I represent out-of-state investors looking for properties in Houston. When I recommend or warn them off a property, my monthly management fee is the last thing on my mind. I want to sell them a property that will be a good investment for them, period. And, by the way, I've also steered them away from higher end properties, which would have been a nice commission check for me, because the potential rental income wouldn't justify the sales price.