Need guidance: Property manager transparency & high expenses on old property (1910)

[Artur A.]

Hi Everyone,

I'm facing two issues with my rental property and would appreciate your insights:

1)Property Manager Transparency: My property manager doesn't readily share details or invoices for expenses, instead asking me to contact them directly. Is this lack of transparency normal or a red flag?

Examples:

2)High Maintenance Costs: My 1910 property's maintenance costs are about 30% of its income. Is this typical for such old properties, or excessively high?

Thanks for any advice or experiences you can share

[Bill Schrimpf]

@Artur A. 

I dont really know the scope of work, but the repairs numbers don't seem crazy high for one-off situations.  Sending every small job out to bid/quote is a waste of everyone's time.  Your PM should have good trades people on speed dial.  If you really want to micro-manage, then self-manage and save the 10%

A good PM would have explained their documentation procedures related to repairs before signing.  It appears you did not have the conversation, so consider having it now.  At a minimum, you should get copies of invoices or work orders to cover your butt if a tenant issue comes up.  

Did you skip the inspection before buying?  If you did, please consider getting one now.  It may be better to cut and run now (sell).  Maybe the property is generally OK and Murphy's law was working overtime.  Inspections are not designed to find everything, but should typically let you know what to expect so you can make an informed decision.  

Because it's an older house, the near-term cashflow outlook is bleak if maintenance and updates (HVAC, roof, plumbing, electrical)  have not been kept up with.  

That being said, talk to your CPA about accelerated depreciation and consider spending the big bucks to fix big systems/problems now.  You will get the tax break in 2024 and reduce your repairs and maintenance, which will help cashflow.