A Logical Way to Understand & Monitor Your PMC's Maintenance Charges!

[Drew Sygit]

Maintenance is one of the biggest challenges, maybe even #1, in the Property Management industry.

Seems maintenance is, Never Fast Enough for Tenants, or Cheap Enough for Owners!

One of the biggest challenges for everyone involved is being on the same page about the actual time required for maintenance.

DIY landlords rarely properly track their time when it comes to property management in general - tracking their true time invested in maintenance is where they perform the worst.

Investors that hire PMCs are rarely any better at understanding the true amount of time maintenance takes. To them, everything takes "5 minutes" to do.

The entire PMC industry has major challenges when it comes to handling maintenance, so it's a featured topic at most industry conferences. 

Even the best property management companies (PMC) struggle with:

- Finding reliable handyman and contractors (ServiceTechs)
- Same with affordable ones
- Tracking preventive maintenance
- Tracking previous work for potential reoccurrence warranty coverage
- Understanding tenant reported problems, so the correct ServiceTech can be dispatched
- Determining if tenant is at fault for an issue & should be charged - and will proof stand up in court?
- Controlling costs for payroll processing, unemployment charges, workman's comp and liability insurance
- Coordinating ServiceTech & tenant schedules for appointments
--- There are several industry vendors that focus on just this! (Property Meld for one)
--- Owners often think a PMC can just enter a tenant's home to make repairs, but don't really understand the potential legal issues of entering when a tenant is not home.
--- Owners don't understand the percentage of maintenance appointments tenants miss!
- And more...

Let's move past all of the above and focus on understanding and monitoring maintenance charges PMC's bill to their clients.

There are two basic components of every maintenance bill, labor & materials. Let's look at each:

MATERIALS

Materials are actually the easier of the two to understand & monitor - as long as there's a decent amount of transparency about the materials needed.
- Once an owner knows what materials are being used, they can then check pricing at Home Depot, Lowe's, etc. 
- Some materials for bigger jobs, like concrete, are harder to check pricing on. You can call suppliers, but may need very specific details to get a meaningful number. You also have to ask about delivery costs and more.

LABOR

Labor charges are trickier to understand, but Google AI to the rescue! 

You can Google just about any specific maintenance issue and ask how many hours does it take. You may have to do this several times for all the different tasks being done.

The only labor cost not covered by this type of online inquiry is drive time from the businessto the property, to the store & back for supplies and then back to the business address. Many ServiceTechs cover this via a service call fee. 

Let's use an example of replacing a leaking kitchen faucet (assuming it can't be repaired):

You can easily find out how much the materials are by going to the Home Depot website and picking one out.

For labor we Googled, "How long does it take to replace a kitchen faucet" and this is the answer we got:

AI Overview: Replacing a kitchen faucet can take 30 minutes to several hours, depending on the faucet's complexity and whether you're doing it yourself.

Professional

• A professional plumber can usually replace a kitchen faucet in 30–60 minutes.
• However, it can take longer if the faucet is wall-mounted or if there are other challenges.
• Plumbers typically charge $45–$200 per hour.

DIY

• A first-time DIYer can expect to spend several hours replacing a kitchen faucet.
• The time it takes depends on your experience and the faucet's complexity.
• You'll need tools like wrenches, a putty knife, and a small bucket.
• You'll also need materials like supply lines, silicone caulk, and plumbers tape.

You may be tempted to be cheap and estimate only 30 minutes, but you should estimate an hour to be safe.

What about the time to go to the property to figure out if a 2-hole or 3-hole faucet is needed, then drive to Home Depot to get it, drive back to install and then head either to the next job or back to the office? Most times you can be pretty safe estimating an hour for this, but if your property is in a rural area or a heavily congested urban area with slow-moving traffic, you may need to be realistic about it taking longer.

BTW: you should be realistic about a Service Call fee even for little jobs. Time is money in the service world and you should expect a base charge if a PMC has to send a ServiceTech to fix something that truly only take 10 minutes to do. They still have to pay the ServiceTech to drive there and back and go get any needed materials.

LABOR COSTS

Now that you have a decent idea of the time required, you need to try figure out what a ServiceTech should cost per hour. This will vary depending on if a handyman can do the job or a licensed contractor is needed. Since costs of living depend on the area of the country, this will also influence hourly rates.

Again though, Google AI can provide answers!

For an example, we Googled, "hourly rate for handyman Austin, TX" and got this:

AI Overview: As of January 2025, the average hourly rate for a handyman in Austin, Texas is between $25 and $25.28. However, the rate can vary depending on the job's complexity, the handyman's experience, and the region. Factors that affect hourly rate

• Job complexity: More complex jobs may cost more.
• Handyman's experience: Less experienced handymen may charge less.
• Region: Some regions have higher labor rates.
• Minimum charge: Some handymen may charge a minimum fee for small jobs.
• Mileage: Some handymen may charge a mileage fee for jobs outside their service area.

What to expect to pay

• A handyman may charge between $35 and $80 per hour.
• A handyman may charge a minimum fee of $50–$100 for small jobs.
• A handyman may charge a mileage fee of $0.30–$0.60 per mile.

Google Ai even warns you about minimum fees and mileage charges!

Hopefully, you've followed all of this so far. Unfortunately, it's now going to get more complicated:(

There are two types of approaches PMCs use to bill for maintenance:

1) In-house ServiceTechs on the payroll, so owners are billed for their time by the hour.
While the labor charges above are useful, they don't cover the true costs a PMC incurs, like:
- Payroll costs for FICA, Social Security, Medicare, etc. that typically add 25-40% to the hourly rate
- Medical insurance costs for the worker
- Payroll processing costs to handle all of the above
- Liability insurance costs in case worker damages something or injures someone
- Workman's Compensation insurance
- Costs of vehicles and tools
- and more...

Typically the management contract will disclose the total hourly rate an owner will be charged. Just be aware it's highly unlikely the hourly rate will be negotiable. An owner can challenge the number of hours their PMC bills them for a project though.

2) Contracting every job out, but the bids aren't shared and owner just gets a bill on PMC letterhead covering labor & materials, with little detail.
This is a pretty difficult situation to understand the charges, so you can monitor them. 
- The smaller the job, the easier to understand using the material & labor steps above.
- Larger jobs may require requests for more detail, so the above steps can be applied.

Be sure to check your management contract for what you agreed to. Unfortunately, most PMC contracts are pretty vague making it a challenge to get useful information.

3) A mix of the two above
Some PMCs have internal handyman type ServiceTechs for small jobs that they bill hourly for, but get bids for any job requiring a licensed contractor.

An owner should understand what type(s) of the above that their PMC uses and discuss as necessary to better understand.

THE CHALLENGES OF GETTING 3 BIDS

We wanted to touch on this topic because it seems to be a pain point between PMCs and owners.

In theory, it's easy to get multiple bids - you just search online for companies and contact them to get a bid. 

But there are some basic bid issues owners are often unreasonable about:

1) There really isn't time to get multiple bids
- No heat during winter or ac during summer can often result in a municipal ticket or worse
2) The job is too small to get bids
- Estimated cost is $700 - how is saving 5-10% worth the time getting bids?
3) Wanting more than 3 bids
- When the first 3 bids aren't low enough for an owner, they think nothing of asking their PMC to get more. They forget time is money and the PMC shouldn't be expected to do this without additional compensation.

Also, many owners are too focused on the cheapest price without understanding all the potential pitfalls. In reality, there's so much more involved that many owners don't stop to think about:

1) Is the contractor properly licensed AND insured?
2) What is their Service Call fee?
3) How flexible is the contractor about meeting at the property for their inspection to generate a bid? 
- Can be a big challenge when tenants are involved for access!
4) How long will it take to get their bid?
5) If approved, how much will they want upfront, when can they start and what's their expected completion date?
6) How do they warranty their work and how can it be legally enforced?
7) What's their reputation?
8) How detailed are their bids?
9) What happens if they don't show when they are supposed and work quality is poor?
10) What can be done if a 3-day job is now in week 3 and still not done?

Many owners expect their PMC to spend unreasonable amounts of time chasing bids and be liable for all of the above issues when something goes wrong.

We hope owners find this post helpful and others can add their expertise to it!