PM Contracts

[Andy Tomaswick]

Hi All,

I had a bad experience with my first PM company, where they were unable to rent a property at a price I had been previously renting it at for over 3 months.  When I attempted to get rid of them, I realized that in the contract we had agreed to use them as our property manager for a year, and that we would have to use their real estate agent if we wanted to sell the property.  Newbie mistake in this case.

I wanted to get a better feel for PM contracts in general - is it normal to have the tie up for a year?  I think I would want to vet that the PM actually knows what they are doing (especially in terms of getting renters into the property) before I sign a long-term contract with one.  

Anybody have any suggestions on how to structure a future contract so I don't end up in that trap again?  I appreciate the advice!

[Emily Beckmann]

When I meet with the owners for the property the first time, I usually go into the meeting having already researched the home. As a Property Manager it is my job to "lend a hand" in the process. This includes price. Most of the time the owners know exactly where it should rent, because you already did this research when you bought the property. When I have my list of similar, recently rented, and still active homes in that area, we can agree upon a list price (as well as a bottom line price, for when the prospective tenant negotiates) and what are plan will be 15-30-45-60 days down the road. 

A big thing that I do notice though, is here in Jacksonville there is such a wide variety of properties in such a small area. The property manager should be able to sort through and pick out the ones that you can compare to, and if there is a question on the house and why it was priced like that, then call the other agent and ask. Homes are ever evolving in the rental market, what is included in rental price plays into the marketability a lot. If the owner is close to what I think we can rent the home for, I dont have a problem listing it there, but letting them know we should have wiggle room and a plan for down the road is important. But i would never tell them NO without a researched explanation, and usually by the end of the explanation they agree as well.