A small property management company has questions!

[Peter Mackercher]

Hi Everyone!

I need your help I own a small property management company in St Louis mo. I'm wanting to grow and I'm having trouble finding new clients. I curious to know if any one had some creative marking ideas. Maybe even a management company that could maybe tell me how they continue to grow. My company Mogul realty is very unique. The company was built from the ground up by an investor with the investor at heart. The main difference with Mogul Reality that sets it apart from the rest of that I also it that i also own a construction company. Therefore we can help you buy your property and rehab it if needed and then manage your property and sell you property at your convenience. Its very nice that the left hand belongs to the right hand. Any thoughts or ideas would be greatly appreciated.

And for those of you who currently use a management company...

What do you look for in a management company?

Are there any common problems you see with management companies?

Is there a feature that you wish your current property management company had, but doesn't?

Thank you all in advance. I would love to hear anyones feedback!!

[Jon Holdman]

If I was looking for a property manager, my first two questions would be:

1) Do you also run a brokerage?
2) Do you have your own investment properties?

The correct answer to both is "No." I don't want you to be distracted with brokering a sale (which is a much bigger deal than a single rental). I also don't want to have to compete with your properties. If you have a well qualified applicant, and you have a vacancy of your own, which one gets filled?

The problem I have with PMs, and why I just don't use them and won't invest at a distance, is that my perception is that they just don't care about my property. Our incentives are not aligned. If I have to pay you to fill a vacancy, you have a pretty strong incentive to accept crummy candidates and let them disappear or kick them out after a few months. That way you get to fill the property several times. How about if I only pay you, at most, once per year to fill a vacancy? Better still, don't make me pay for that at all. Lets face it, with a good tenant and a good property, most months "managing the property" amounts to collecting the check, depositing it, and sending an accounting. Now, I don't do the accounting part, but I do do the other parts. By far the most time consuming is driving to pick up the ones that get in person treatment. With direct deposit ones, its two minutes work to send them a receipt. So, if I'm paying you 10% of the rent for two minutes work, I don't really want to pay for filling a vacancy. That's the time consuming part of this business. If you do it once a year, and the rest of the year you do two minutes work, you getting more than a full month's rent. IMHO, that's enough, even if you have to fill a vacancy. If you fill it multiple times, then you're not really getting good tenants, are you? By not paying you for each vacancy, your and my interests are better aligned.

If we really want to get our interests aligned, lets do the arrangement as a master lease. You lease my unit from me, and then sublease it to your tenants. If you are doing the PM, and handling all the minor maintenance, I'll lease it to you for, say, 20% below market. I'll pay if a big repair is needed (e.g., roof, furnace, sewer), but you handle anything less than some threashold (any minor plumbing, painting, cleaning or replacing carpet, etc.) You pay me whether its rented or not. If you keep it filled and control the maintenance (now our interests are again well aligned) you get more in your pocket. If you can push the rents above market, that's your money to keep.