Property Management Professionals - would you allow DIY repairs?

Question

Hi BP,I am new to investing (still looking for first property) and have some questions about using a property management professional..I have not met/interviewed with any local companies at this point in time.I know that I want to hire a property management company to manage the tenants, rent collection, leasing, etc.. but I have many very handy people in my family (one of whom is a licensed general contractor) and I would prefer to use them over an unknown repair man. I have never hired anyone out at my own residence. My fear is that a simple $15 repair could end up billed for $100.1. Has anyone ever negotiated with their property manager to allow DIY repairs? 2. Could I use that to negotiate lower PM fees? 8% rather than 10%? I would expect them to take the call, but inform me rather than calling and scheduling a repair man.3. What am I missing that makes this a bad idea? (Other than availability/schedule of family members - they would, of course, be reimbursed for their time and materials)

David E. Michel Jr. · Answer

@Meghan CusterEach management company is setup differently and may allow you to add your preferred vendors to their network of vendors. At my management company, I have a trusted network of vendors that go out of their way to perform work for us. This helps control cost, and ensure quality and accountability. Plus we always collect W-9s and COIs on any vendor that we use. I have added vendors that some of our investors suggested. They will need to fit our criteria of being professional, courteous and on time. We try to provide a high quality of service and if the contractor is messy, unprofessional, then we the management company is dealing with the fallout. If they can not produce W-9s or COIs because this is a side gig for them, then we do not authorize any work with them. Property management fees vary between companies and sometimes that company stays true to their management fees that they offer. Our company in NC offers commission structures depending on if they purchased the property through an agent of our firm and we offer a discount to Medical Personnel, First Responders, Teachers and Veterans. Call around, ask your questions and hopefully you find the right company that fits your needs.

TIm Harstead · Answer

1. Has anyone ever negotiated with their property manager to allow DIY repairs? DIY no could cause major problems if something small is mishandled and turned into something bigger. however if you have an actual contractor Like your family member than we would allow them to become your preferred contractor and give him first right of refusal on all repairs 2. Could I use that to negotiate lower PM fees? 8% rather than 10%? I would expect them to take the call, but inform me rather than calling and scheduling a repair man. As a PM this makes our jobs harder a good PM has automated systems with their maintenance team, you are asking them to change their routine, and trust me most preferred vendors are a lot harder to get to a job site or to even just get a hold of than the ones we speak to on a daily basis. 3. What am I missing that makes this a bad idea? (Other than availability/schedule of family members - they would, of course, be reimbursed for their time and materials) Availability would be the biggest thing to make sure before you move forward does your family have time to go in the middle of the night for a busted pipe?

Christine Kankowski · Answer

If a person is licensed and insured, we are happy to assign all maintenance requests to that person. They would need to use our system, like our other vendors and do it in a timely manner. The times we ahve done this had actually caused more work for us, so we would not give a discount. For example: 1st maintenance request, that vendor was out of town and tenants got frustrated when repair was late. Owners vendor changed the locks prior to new tenant as is required, but only forgot side door, and have a different key for back door, but didn't provide key. This required followup on our part, tenant aggravated, etc. when 1 call to locksmith would have resolved it from the topProperty mgmrs have systems in place to do things systematically, efficiently, etc. and with licensed personnel. Chanign their system created more work, so IMO no discount. OR give discount but when we need to get involved when we shouldn't have, fee is charged.

Steve Maginnis · Answer

Hello @Meghan Custer. We do allow owners to either handle their own work or to arrange their own vendors. However, we make it very clear to the tenant that this is taking place. If there are any delays or negative experiences, I drive this home with the tenant, and place the blame back on the owner. We do not want negative feedback against our company when an owner is at fault. We really try to distance ourselves from this as much as possible. We explain this to the tenant in advance. I also don't mind telling the owner that we will let the tenant know that the owner is responsible for any issues or problems they may experience associated with the repair. I do understand how larger PM companies have policies that prohibit this, and will not take on the property if the owner demands they perform any/all work. You should be able to find a PM to work with you if you decide to move forward with this course. Best of luck.

Caleb Heimsoth · Answer

@Meghan Custer I do this. They don’t care if they use they’re vendors or mine. I pay 7 percent gross rent. That’s it. Granted that’s not a deal as that’s what they charge. I use both my own vendors and theirs. Sometimes I do the work myself. Saves lots of money

Jim Goebel · Answer

@Meghan CusterI'd value the input of the 2 property managers above. However, as one alluded to - they all operate differently. If a property manager felt this was too big of a deal - my question to them would be why would this be difficult to add another vendor to your list and give them the option to come out and help? If they don't have the technology in place or the flexibility in how they're doing business, move on to the next.