All Forum Posts by: Michael Smythe

@Michael Mattingly

Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

@Tonia Butler Kinsey what your agent said is technically true, but the reality is it could get very expensive for you.

Tenant could stop paying rent, and you take them to court. 

Tenant tells judge this was a pre-existing problem and then what's your defense?

The better route is to convert to MTM with 45-day Notice Period, otherwise you get to charge an Early Termination Fee. 

I'd also get the tenant to sign a Hold Harmless that they are giving up their right to sue you or to ask for a refund of rent.

@Julie Philpott why not just hire a property management company?

Questions:

1) How much exposure?
- Where are you advertising it? 
- How many websites?
- How are you verifying ad accuracy on all the posted sites?
- How are you tracking weekly ad views?

2) How does your rental compare to neighborhood market?
- You stated that all the houses are small in the area, but how many are currently being advertised for rent?
- How does yours compare for fit, finish & amenities via either online interior pics or you personally visiting
- What can you copy from these other properties' ads to improve yours?

3) What is the feedback from the Showings?
- You have to strategize and ask the right Open-Ended Questions to find out why they truly are not applying, as many prospects deliberately give vague, useless answers to avoid pressure.

4) What are you doing to change the current results?
- How often are you dropping the rent?
- How much are you dropping it by (we recommend 5% each time)?
- What incentives are the competition offering that you have to keep up with or seem to be working? - Look at properties that have rented in the last 3 months for more insight.
- What additional improvements to the property can you make to be 5-10% better than them? 
- What appliances of other amenities can you offer?

Finding people you can TRUST to build your Core 4!

Many of them take advantage of OOS investors because they know no one is closely watching them.

@Terra Padgett most "gurus" are referring to either:

1) Class A properties & tenants - which perform very well

2) Portfolios of at least 10, if not, 20+ properties. Than it's all statistics.

Google Michigan LLC Agent

You forgot Detroit

What Neighborhood => Property Class?

If Class C, investors should expect 10%+

Is your basement apartment up to code?

If not, you may have legal issues trying to evict these tenants.

If yes, just get rid of them and appreciate that you got a cheap lesson to learn from.