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At one point I owned and managed 33 rentals. I have seen many when I was acquiring them that were managed by management companies. I have seen the tenants they chose, the workmanship they charged the owners for and I knew the day I felt I could no longer self manage was the day I would sell. Nobody is going to manage your properties the way you would.
I use a company to do screening and I thoroughly vet tenants. I use a company to collect rent via automatic draft. I have solid established relationships with two each plumbers, electricians, painters, roofers and HVAC companies. I have a fence guy. I have a window guy. I have a cleaning person. I have a real estate attorney. I used to have a contractor/handyman type to do odds and ends type things but we take care of those things ourselves now because I have a skilled partner and personal abilities but there are others who do as well. If you have good relationships with a variety of trusted contractors and tradesmen it isn’t very difficult to properly manage and address anything related to managing a rental property. Paying someone 10% of the monthly rent to take a phone call once in awhile so they can schedule a repair never made much sense to me. The number one key to being a successful landlord is picking the right tenant and the second thing is repairing things right the first time. The greater the turnover and the more repairs needed the more the management company makes while the fewer turnovers you have and the less repairs the more the landlord makes- very much a conflict of interest.
I think it's a matter of scale. You had 33 rentals so management fee adds up quickly, $6,000 to $10,000 a month at 10% fee. You're doing this "full time" in order to reduce your expenses.
But for majority of small rental property owners, one or two properties, the cost benefit analysis goes to hire a professional management firm. Most of us have other business to run or have a full time job, we can't just drop everything at a drop of the hat to respond to tenant's maintenance call. I live 2 hours drive away from my rental, it's just not realistic to work as a maintenance guy. For me, paying property management firm is money well spent. It is a cost of doing business and is deducted from my expenses.
I think it's a matter of scale. You had 33 rentals so management fee adds up quickly, $6,000 to $10,000 a month at 10% fee. You're doing this "full time" in order to reduce your expenses.
But for majority of small rental property owners, one or two properties, the cost benefit analysis goes to hire a professional management firm. Most of us have other business to run or have a full time job, we can't just drop everything at a drop of the hat to respond to tenant's maintenance call. I live 2 hours drive away from my rental, it's just not realistic to work as a maintenance guy. For me, paying property management firm is money well spent. It is a cost of doing business and is deducted from my expenses.
Of course, for those who don’t live near by or want to be bothered it can be a good solution. But as you suggested the costs can really add up and when you consider the amount being paid for the amount of time/work being done it often doesn’t make sense because with a little know-how it is very doable. It really does depend on what you’re comfortable with.
First you need to realize that property management and realtor are a separate professions. A good realtor does not have time to do property management and a good property manager is not a realtor.
Get a full service professional property management company , not an individual. A full service firm that will have staff to handle different aspects of your property management, starting with assigning a property manager who reports to you on a regular basis about your tenants and any issues with your building, a billing and accounting department that issues you an itemized statement monthly, and copies of contractor's quotes for repair, and a large network of contractors that can get to your rental right away and be responsive to tenant's needs.
BTW, despite what others say about 10% monthly fees, I pay 7% all inclusive fees. That includes advertising, interview prospective tenants, run credit checks ($35/ each but that fee comes to me), and supervise all maintenance & repair work in between tenants.
How do you find such good property management company? Get recommendations from other property owners, professional realtors who has rental properties, remember a good realtor is too busy and has no time to do property management even on their own properties.
Just got a quote from another company They are highly rated, professional , and have their own house techs for service calls.
However, they are telling me first months rent they take 50% (first month) then + another 10% ... Does this sound normal to anyone ?
We rented out a townhouse through a property management company. Paid 10% plus an additional fee for finding a tenant.
Over the course of the year, we repaired or replaced the refrigerator, the microwave, the stove, and the garbage disposal.
The tenant moved in his daughter, her live-in boyfriend, and their assortment of kids. Property management firm did nothing about this violation of the lease, and nothing about the mess they made of the place.
We decided not to renew the lease. After they moved it cost us several thousand to get the place back in shape. The property management firm told us that we should expect some "wear and tear" on a rental and refunded his damage deposit.
And this management firm was recommended by several people.
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