All Forum Posts by: Mike McKinzie

 Benjamin

I, too, have owned Commercial Property and I managed it myself.  I have since sold it.  BUT, if I would have owned similar Commercial Property in 10 Different States, then I would have to have some sort of management in place.  Maybe not full management, but at least local folks I could call on when needed.  Whether the management is the investors own staff, or contracted folks, or consultants or a full blown Property Manager, if the investor is not local to the property, there has to be some sort of local assistance. I would bet that there is not a single BP investor, who owns out of state property, who gets on a plane and flies to their rental every time there is a repair needed or to collect rent or to make a monthly inspection.

With that being said, YOU DO NOT ALWAYS GET WHAT YOU PAY FOR!  Benjamin Franklin said, "You can pay too much for a whistle!"  I just bought a brand new pair of Sketcher's Sport Shoes and I bought them at the Skechers Factory Outlet.  I could have paid TWICE as much for them at Macy's or Nordstrom's, but I got them at the outlet store.  SAME SHOE!

A PM should charge a single monthly amount, AND NO OTHER CHARGES!  Charging to fill a vacancy only INCENTIVIZES turnover.  Charging to renew a lease INCENTIVIZES short term leases.  If a person can't run a PM business on the monthly fee, then they don't know how to run a business economically.

We just sold one and are looking to buy 2-3 more.  Please send me the entire list, [email protected].

Thank you.

While I have contributed a little to BP, I am starting to try and use some BP members.  I was looking at the companies here on BP and all I see is an alphabetical listing.  Is there a way to just see, let's say "Lenders", or "Turnkey Companies" or "Property Managers"?  And then divide it even further into geographical areas?  Let's say I want to find a PM company in Atlanta, GA, how would I do that kind of search?

Have a good one Josh. 40 is the new 29, don't let a number get to you! You have a lot more to give the REI community!

For those of you who are defending Property Managers Fee Structures, I want to THANK YOU for your input.  As I stated in my very OPENING line, NO ONE on Bigger Pockets is as staunch a defender of Property Managers as I am.  Some of you seem to forget that is how I started my post.  And I still defend them today.  My point is a MACRO view of the industry itself.  It is evolving like the Airline Industry.  30 Years ago, you bought an airline tickets and then there were NO MORE CHARGES.  You were allowed two bags and a carry on bag, NO EXTRA CHARGE.  Today, Airlines charge for this, that and every other thing.

@Adam Willis, you missed THE most important aspect that I find lacking in nearly all PM's today, Quality, Timely COMMUNICATION!  It makes me feel that PMs would rather CHARGE me more and TALK to me less!  In December, I had a Hot Water Leak that did some severe damage and I NEVER heard a word about it, I had to see the initial Water Extraction Bill show up on my Online Statement and I had to email them to ask what happened!!  I would think that when damage is done that is going to cost several thousand dollars, the owner should be notified immediately!  And this is just the latest example.  I have 25 rentals in 6 states managed by 8 Different Property Managers.  So you folks who are defending PM's, I agree a good property manager is fantastic, it is just getting harder and harder to find them!

@Chris Martin, that is a DISGUSTING blog and exactly what I am talking about!

@Stewart Guthrie, you sound like an airline owner who wants to charge $5.00 to use the on board restroom because he/she has a 'captive audience.'  I agree with the part about disclosing up front all the fees.  My latest experience is a PM who charged ONLY a percentage of the rent when I signed up with them but they want a NEW PM agreement every year.  And in year two, they add fees for getting new tenants, for renewing a lease, for making repairs, for starting a rental with them and a lot more.  So I call ten other PMs in that area and they are all charging these fees.  Talk about a monopoly/collusion!

Interesting that I have not received any defense comments from the Property Managers out there.  No one?

and Property Managers in general,

Just about no one on Bigger Pockets is as big a defender of Property Managers as I am.  While some folks are great DYI people and can manage their own properties well, I am a firm believer that a Great Property Manager will actually INCREASE an investors return on a piece of property.  Not only did I run my own property management company back in the 1980s, I have just recently gone back to work, for a Property Manager here in Orange County, CA.  We manage about 4,500 units and I manage the Accounting Department and have five people under me.

But I have started to notice a trend in Property Management that is weakening my defense of you. I am seeing more and more ways that you guys are GOUGING the investor. Back when I ran my PM company, I got my 10% fee and THAT WAS IT. I did NOT charge for renewing a lease. I did NOT charge for finding a new tenant. I did NOT charge extra for a repair. I did not have my own in house repair company. And the company I am now working for also does NOT charge to get a new tenant, does NOT charge to renew a lease, does NOT charge a 'commission' on a repair bill. As a matter of fact, I have 11 SFR rentals in CA and NONE of my California PMs charge for a new tenant or charge to renew a lease or charge extra on top of a repair bill. And one of them, who manage several rentals, charges me 6% of the months rent and NOTHING else, EVER.

Therefore, having run my own company, having current PMs manage for me and currently working for a PM in CA, I know what it cost to run a PM company and gouging us is very unprofessional.  And please don't use the cliche "you get what you pay for" as I have found that to NOT be true very much in life.  I will absolutely PAY more for good quality, but it better be as good as the comparison between a Rolls Royce and a Yugo.

I will continue to DEFEND Property Managers as I like to invest in a variety of places.  But if this trend continues where PM's try to find "new and exciting ways" to gouge the investor, I may be forced to semi-self manage my properties.  I have the knowledge and skill, I just thought my time was more valuable, but when a $1,000 a month rental COSTS me $3,000 every turnover, that might convince me my time is worth semi-self managing.

This may sound a bit like a RANT, as well it should.  I don't like overpaying for anything, from an ice cream cone to a new rental.  As is always said on Bigger Pockets, you make your money when you BUY, so BUY right.  I am 'buying' Property Management so I want to buy right.

As a final question to BP, have any other investors noticed this same trend in Property Management, that they keep finding ways to charge us?  Or is this just me?