What To Look For In A Property Management Company!
I think the subject title covers the primary idea...
I am looking to purchase out of state rental properties and havent dealt with a property management company before.
So for those of you that has dealt with PM before, please provide us with a checklist of what you look for in a PM, what they can and should do (eviction, finding and screening tenants, section 8, collecting payment, 24 hours maintainance, etc...)
Please also provide us with pitfalls... What we should be aware of, any additional cost that is out of the 10% fee....
Thanks in advance for any inputs... God Bless.....
Anyone?
ruizhen18;
I'll try to summarize services that are offered by property management firms. Certainly not complete but should be a good guide for you.
1. Tenant Placement, which include
- Advertising for tenants
- Showing the unit to prospective tenants
- Prospective tenant application process and credit checks
- Lease execution
- Collect security deposit
2. Monthly Property Management, which include
- Collect Rents from tenants
- Pay landlords expenses (utlities, mortgage, insurance)
- Respond to tenant issues / emergencies
- Eviction process, if required
3. Property maintanence and upkeep, which include
- Fix problems
- Snow removal, if required
- Lawn care, if required
- Common area cleaning
- Tenant turnover (painting / cleaning)
The fees typically charged for the above are:
#1 - One months rent
#2 - 7 to 10% of monthly gross rent
#3 - Fee for service, it varies and typically isn't included in the 10%
Hope this helps, Mark
Many PM firms own a maintenance/repair company. Some of the companies, while owned by the owner of the PM firm, have a completely different name so you cannot tell whether they are inter-related. I would suggest that, if possible, you find a PM firm who does not profit from the repairs and maintenance required by your property.
Many PM firms own a maintenance/repair company. Some of the companies, while owned by the owner of the PM firm, have a completely different name so you cannot tell whether they are inter-related. I would suggest that, if possible, you find a PM firm who does not profit from the repairs and maintenance required by your property.
Many PM firms own a maintenance/repair company. Some of the companies, while owned by the owner of the PM firm, have a completely different name so you cannot tell whether they are inter-related. I would suggest that, if possible, you find a PM firm who does not profit from the repairs and maintenance required by your property.
One of my indicators is the contract they want you to sign. I had one company that wanted to charge $75 just to post a For Rent sign in the front yard with a $12 surcharge if the property was located more than 20 miles from their office and an additional $15 per vacancy. They also wanted $250/ door maintenance account. Additional examination made it clear that they were going to make more money when there are vacancies-- a clear conflict of interest.
My preference is very small management companies. I am not as concerned over what is on their list of services but how they perform these services and whether the service is included in the monthly fee or if it is an add on.
All I can say is to make every effort to choose the right company. We have two apartment buildings, and have been through two management companies, and have not been able to find someone reliable. They have not been able to find tenants, and have run up large maintenance bills (very large).
Make sure the contract has a spending limit, make sure it is clear that you will not be responsible for any money the manager spends in excess of that limit.
And, very important, keep on them. I was busy with other obligations and let them get away with much more than I should have, and have paid a steep price for it.
Ed is 100% correct on "How They Perform".
To list the services is one thing, making it happen is another. Ask for references. Ask other landlords.
Good luck, Mark
Quote:
On 2005-01-04 17:18, edmeyer wrote:
My preference is very small management companies. I am not as concerned over what is on their list of services but how they perform these services and whether the service is included in the monthly fee or if it is an add on.
Are we ever tied to one property management company? Or can we make it a monthly basis?
For example, the PM is doing a horrible job and would like to switch PM, but stuck with them for the rest of the year, because we have yearly contract....
I have also heard that many PM like to spend on unnecessary expenses or repairs, some bogus.
What can we do to avoid? Are they even allowed to do that? They will provide receipt for each of them right? Or can that be bogus also?
I think PM they are responsible for maintainance for example, lawn care, snow removal, etc.. They are included in the monthly percentage fee?
And for major repairs, we can always purchase insurance for the property correct?
Thank you guys for the inputs, I think we (newbies) can all learn a great deal from you pros...
Anyone that has ever make use of Property Management Companies, please feel free to share your experiences. Thanks.
I use a PM for a couple of houses that I have in a gated community 2 hrs. away. What has worked:
Energetic, communicative, intelligent PM
Interested, respected Assistants who are part of the team.
You have to be careful of conflict of interest. If they are sending work to family/self you need to know. They must be willing to let you designate who does the work on your houses IF you decide to. It is ok as long as they are less expensive or more flex, but you have to keep your eye on this.
Are they too busy to show clients? Do they list vacancies immediately in the MLS and get the lock box on the prop? What do they charge for new tenant?
8 % Collected rents ...top off at 100 bucks mo.
NOT a full time maint man who must be supported on your dime w/automatic walk in fee. They learn to move very slowly if by the hour.
NOT an overworked sales agent who shows on the side the rentals of which they have too many! They never return calls of rentals! == People give up.
I tried to use a PM Company when i started my rental business, after 3 months and none of my SFM mhomes was filled, even though i get billed Maintenance fees monthly on each of the 4 properties i placed in their care, i terminated the contract, make sure you have an easy exit strategy in the contract, so you can fire and hire until you get a suitable one. After i fired this PM co, i filled 3 on the houses the following month. Of course, it is tough on me managing my properties (5 SFM and 2 Apts with 38 units total) myself because i keep a full time engineering job, i am still not in a hurry to hire a PM. I guess you may have to tried them out until you find an acceptable one.
Does anybody have thoughts about LONG distance rentals. For instance, living in California and puchasing new home in Austin, Tx. The repair fees should be minimal considering it it new. THe problem is that I dont know how often I would be able to make it out to Austin. It's kind of like buying a business half way across the country, turning the keys over to a manager, and expecting him not to rip me off. Do you feel that, if your are not on top of things, all PM companies will rip you off?