Property Management Expenses

[David Telp]

How do you verify that the maintenance repairs that a property management company is charging you for are true and correct

[Andrew Johnson]

@David Telp Well, there is more than one challenge here.  If I have any $300+ charge then I have the option to have my PM get 3 competitive bids.  She can send those two me and I can choose.  That's all well and good until there's a plumbing leak.  You need someone there is an hour, not a few days while we go back and forth on quotes.  And, guess what, I'm going to pay a premium (like anyone) for that "service in an hour" so I'm going to get a bill that looks really high.  But, in actuality, might be a good deal relative to the needs for the property at that particular time.  It's easy to play Monday Morning Quarterback, I'd encourage you not to :-)

Now when it comes to if it's a "true" charge, well, through my owner portal I see scanned copies of the receipts for those repairs.  Heck, I see scanned copies of the Lowe's receipt if the handman goes there to pick something up to install on the property.  Now the contractor receipt will should have my property address on it.  The $20 Lowe's receipt won't, so there's some element of trust that goes into that.  And, of course, who knows if my PM has some weird back-scratching relationship with contractors for phony receipts to bilk out-of-state investors like me.  It could happen but someone would figure it out, post it all over the interweb, and it would start coming up in a Google search.

So the net result is that you can ask for 100 things as far as verification goes.  Pictures, receipts, invoices, competing bids, etc.  I would posit that if you PM wants to defraud you, they'll figure out some way to work around those checks and balances.  I'm not advocating your never check-up, never visit the property, don't look at your monthly reports, etc. but:

1.) If you think your PM is defrauding you, get another PM.  If the trust is gone then the relationship is just plain dead, time to move on.

2.) If you have an inherent need to grind on every nickel-and-dime expense, manage it yourself.  By that point you'll be so 'active' in the management of the property you likely don't need a PM :-)

My net advice is always the same:  focus on the big stuff.  And typically that "big stuff" is vacancy.  Debating a pass through labor charge of 30 minutes to change a lock (when you know it should only take 10 minutes) will just give you an early heart-attack.