All Forum Posts by: Soh Tanaka

I had a chance to review a few property management companies in a short period of time, and it made me wonder why they charge so much. 

Typically the monthly charge was between 8%-10% of the rent. If you rent is $1,000, they charge $1,200/year. But for what...? If you have a property management company who only manages in good A/B area, the phone calls you get per year is maybe a couple of times a year. That's $600 per phone call. If you only collect the rent online, you virtually do nothing. Bookkeeping should only take a few minutes. And higher rent does not translate necessary into higher management cost, so the fee should be a flat fee. 

Some companies add some extra % to the maintenance cost. I understand handling the maintenance takes time = cost some money, but that should be easily covered by the monthly charge.

Also, they charge lease renewal fee anywhere from $50 - $500! I understand that sending a renewal, have them sign it, and file it back cost some money, but I can't imagine costing more than $50, unless you go to the property, do some inspection, maybe change out the furnace filter and take pictures, then I can see the cost go up. But again, the monthly charge should easily cover this kind of activity. 

Finally the tenant placement fee. Usually $500 to half month rent to one month rent. I understand this is very time consuming. Receiving phone calls, screening over the phone, setting up an appointment, going to the showing (only to have a no-show sometimes), etc. But what if you can use a service like Rently or ShowMojo successfully? Can we cut some cost there? 

Summary:

• Flat low monthly-fee ($60?)
• No extra charge for the maintenance calls (the monthly fee should cover the handling of the occasional calls)
• No extra charge for the renewal (the monthly fee should cover the handling of the occasional calls)
• Use self-showing technology to offer low-price ($300?) to fill vacancies (I never used this technology but heard good things about it from different people. If people can successfully have strangers come into your furnished house and sleepover = Airbnb, you can have strangers come into your empty house for a few minutes, imo) 
• Collecting rent, requesting maintenance (except if it's an emergency), filling applications will done online only.
• Virtual office (depending on the regulations, a physical office maybe required.) 

 While I'm an experienced property manager for my own properties, I never managed other people's properties, so it's very possible that I'm missing something here. All your thoughts welcome!

@Dustin Kooy It is on the higher end but is within the market standard range I think. I would ask for what the renewal fee is also. 

Lately I've been thinking why the management & tenant placement fees are so high. Once you have good tenants in place, you only get a couple calls a year. If the rent is $1,000 and the management fee is $100, you are paying $1,200 to answer 2 phone calls...  

Also, I don't understand why some companies charge high renewal fee. Having the tenants renew the lease doesn't take that much time = money. 

I understand the need to charge for the extra when placing new tenants. Answering calls and showings take a lot of time. I think the solution is to use a company like Rently to do self-scheduling and self-showing. While I can see that some will not be comfortable with this kind of technology, I'm willing to try this the next time I have to fill tenants.   

I also like to look at how landlord friendly the particular city/state is, and how the population is changing. For that reason, Chicago will not be my choice. 

I guess everything is subjective. Pretty much every state will looks landlord friendly compare to California. I live in IL Lake County but am looking for properties out of state. Illinois is tenants friendly side and as you mentioned, the property tax is very high.  

I agree with @Sylvia B., a picture of the outside would help for us to share our thoughts. If there's any space to put some mulch, go for it. If some bushes/trees need trimming, just do it. I won't plant anything though.

I think you already know the answer. The problem is not that you don't know what to do, but it is that fact that it'll be hard to convince your husband to agree with you to spend some money. That been said, carpet and paint is relatively cheap, and they can dramatically make the house look better, you know that. If anything, that will get the house sold faster. 

I used Estrada Fences in the past, and they did a good job. I don't know if they sever the area you want though.

Generally speaking, assuming the provider is a good one, you get a house that is all fixed-up and rented or ready to be rented, but you'll pay pretty much the retail price. 

Single family homes in North West Indiana (NWI) is a good place to invest. I know a lot of people invest in Indianapolis also, but I don't have experience there. I would suggest to look for those members who resides in NWI and get connected with them. 

I used to use Navajo White, but now I only use Alapaca (light gray) or Requisite Gray (gray). They both look very nice.