Concerns with Property Management in Chicago Area

[Hares Najand]

Hi BP community,

We currently own several Section 8 rental homes in Chicago, Markham, and Country Club Hills, IL, all managed by the same property management company. While they are good communicators, experienced with Section 8, and their software for rent collection is solid, we're increasingly concerned about a few key issues and would appreciate input from anyone with similar experiences:

Turnover Fees Transparency:

The turnover fees seem high, and despite our requests for itemized breakdowns and man-hours to justify these costs, we feel they may be taking advantage of our out-of-state position. All turnovers are handled "in-house," with no outside bids or quotes to ensure market rate repairs. Is this common, or are we overpaying due to lack of competition?

Move-In Fees vs. Security Deposits:

The property management charges tenants a "move-in" fee rather than a security deposit. We feel this doesn’t protect us from tenant damage (e.g., stolen smoke detectors, fire extinguishers) or cover costs for anything beyond normal wear and tear. Their rationale is based on Illinois law, where security deposits must be held in a separate account and accrue interest if held over 6 months. They also claim move-in fees avoid court disputes. We’re willing to manage a separate account and deal with potential disputes if it means better protection. How do others handle this situation?

Delayed Advertising for Vacancies:

They don’t list properties for rent until the tenant vacates, which prolongs our vacancy periods. Has anyone dealt with this issue, and how did you push for earlier advertising?

Overall, we’re not ready to move to a new property management company without hearing from others. Have any of you had experience with similar property management challenges in the Chicago area? Looking forward to hearing your thoughts!

Thanks in advance for any advice!

[Drew Sygit]

@Hares Najand here's our thoughts as a PMC:

1) Turnover Fees Transparency:
- What does your contract with them require them to provide? 
- Does your contract allow you to get your own bids or will they agree to this? Just don't get cheap Craigslist contractors that are unlicensed and uninsured!

2) Move-In Fees vs. Security Deposits:
- What does your management contract state about this? If it's not covered you will have to renegotiate.
- In our experience, many S8 tenants cannot come up with a security deposit (SD) of a full month of rent:( So, this may be their adaption to the market. We ALWAYS require a full month of rent for SD, but we also lose a decent amount of S8 applicants who can't come up with it.

3) Delayed Advertising for Vacancies:
- It is VERY difficult to arrange showings on occupied rentals, especially if Class C or S8 tenants! WHY?
--- The property is not in showable condition, so no one will want to apply.
--- The tenants just won't cooperate:
Yes, you can try to get in with a Legal Entry, but then they can easily sabotage the showing by:
----- Being rude
----- Keeping the house dirty (or worse)
----- They can keep an aggressive dog in the house when they are not there
----- They can deliberately leave an unattended minor alone in the house


Your current PMC should be taking the time to address and explain all this to you!