Property Management and continuous stream of repairs... What would you do?

Question

Hi,

I have a property in a different state that I trusted the PM company to take good care of. After two years, I've received 30 maintenance requests from the tenants, which seems like a lot. The PM company happily dispatches repair people every time without questioning much of anything:

- The same repairs seem to happen repeatedly, so can the repairer be trusted, or should something else get fixed first?

- If the house has so many problems, why did the renters happily renew their lease twice already?

In any case, I'm not sure what to do. All the cash flow is eaten by those repairs ($3,000 and counting this year alone), and the PM company has a clause that doesn't allow me to switch to a different company: I'd have to pay them till July 2024 to get rid of them.

What would you do in my situation?

Henry T. · Answer

All anyone here can do is guess. It would be helpful if you included what the repairs are, and if you think they're legit or not, and why not.

How old is the house? List the repairs please.

Matthew Masoud · Answer

Sorry you're going through this.

Few things popped into my head while reading this.

1. is this an older property? If it's an 80-year-old property I wouldn't be surprised at the excessive repairs.

2. I would create more clear boundaries with the property management company. Any repairs over $x need to be approved by me. Once you spend more than $xxx per year on repairs, all repairs need to be approved by me, etc.

3. I would ask for more details of the repair history. What was fixed, how much did I pay for this repair, and why is the same item being repaired multiple times?

If they know you're looking carefully, they're less likely to engage in funny business.

I'm not sure why you would agree to lock yourself in with them for so long but if things don't turn around you may want to speak with an attorney about how to get it out of the contract, if at all possible

Julie Hartman · Answer

@Alain Chautard What does the management agreement say about how repairs are handled? If it's silent, then I would start by asking the PM their process for handling maintenance requests. If they simply dispatch the handyman or other service provider without any trouble-shooting Q&A with the tenants, then I would find a new PM. Minor repair requests can typically find a free solution if handled by a competent PM. For example, a garage door that won't close is often a misaligned door sensor or closing force setting. A clogged toilet will benefit from the employment of a plunger, etc. Going forward, I would tell the PM that you want to be contacted for pre-approval before any service provider is sent. And double check the pre-approved spend limit and adjust it if possible.

Kim Meredith Hampton · Answer

@Alain Chautard

What kind of condition or age, was the property rehabbed prior to the renter taking occupancy? Sounds like a lot of needed repairs, a maintenance monster or a combination of both!!

Let your PM know what and what you won’t repair from this point forward, and that you want before and after pix from the contractor

Laura Stayton · Answer

You should be getting invoices for each repair and can call the vendor to make sure they're legitimate. Hopefully they also have an online portal where you can track every ticket and see what the issue is and if it's a recurring issue or not (and if so discuss why) Call the contractors directly to discuss and ask if there is a markup for the management company. If it's in house maintenance then they're making money every time someone goes out. So many investors think this is a good thing (and it can be) but it also allows unscrupulous companies to profit on maintenance.

Reading the contract thoroughly is so important and finding a reputable company. If you think the tenant is reporting things erroneously then tell them not to renew them.

You may need to get an attorney involved.

Reading the contract thoroughly is so important and finding a reputable company.  If you think the tenant is reporting things erroneously then tell them not to renew them.

You may need to get an attorney involved.

Melanie Thomas · Answer

I recommend asking additional questions. Engage in a conversation with your property manager, request copies of invoices to gain a better understanding of the repair requests. Determine whether these repairs were primarily cosmetic in nature or other. Also, inquire with the property manager about their policies regarding tenant chargebacks. Effective communication plays a pivotal role in this situation. Good luck & happy investing!

Ned J. · Answer

More details are needed. They could be warranted if the house is not in so great of shape or has real issues.....or it could be a PM that jumps every time the tenant says "jump" because they make $$ for every service call. So the tenant calls for every tiny thing and the PM says "ok" since its not their expense and they make $$ off it.

So you need to get more detail from the PM...more details on what was "fixed"...when.... why... how much etc etc. Then you can at least see a pattern to determine if its legit or you are getting screwed.

Melissa Nash · Answer

This is very frustrating. Why are the repairs so high? Who is doing the work, and is it warrantied? I would get quotes outside of your PM, you should be allowed this. Also the PM should NOT be sending out dispatch repairs like that- that is a big red flag. I would request a walk through with a handyman and see what is actually going on.

Did the PM do a walk through before tenants moved in? This is definitely a red flag and very unusual. If the tenants are causing the issues - they need to pay for those bills. You are only suppose to pay for items that are not caused by the tenants. Example: if they broke the curtain rod because they pulled too hard. That is on them, not you. But if the curtain rod was put in really cheaply and wrong- then you should pay for it. That is why initial walk throughs and inspections are very important.

Property Management and continuous stream of repairs... What would you do?

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