Seeking feedback from property managers and investors with PMs

[Wesley W.]

Hello All,

I'm reaching out to those of you that have property managers maintaining your rental portfolio for you and those PMs that service those investors.  For several years, I have self-managed my growing portfolio.  I have reached a "critical mass", making it difficult for me to continue to scale without delegating work out.

I began by hiring out lawn care/snow removal a few years ago, and found a great reliable guy who, sadly, closed his side hustle landscaping business a year ago.  Since then, I have experienced a veritable revolving door of disappointments.  I went through no less than 3 snow removal people this winter, before having to take it back over myself due to the people flaking out and leaving my tenants stranded.  (Before anyone suggests using my own tenants, these are small multifamily buildings and in NYS snow removal is a "non delegable responsibility", so when they don't do it - I am on the hook.  Thus, I'd like to use a professional.)

Last fall, I sought bids for snow removal (shoveling/blowing walkways - no plowing) and to those that bothered to respond, I got ridiculous prices back ($150-$225 per trip; it takes an hour total to shovel all the properties, including travel time between).

This spring, I am seeking lawn maintenance bids and I am experiencing the same thing; outrageous (in my opinion) prices for the work involved.  Now, I don't begrudge anyone from making a living, and I always seek to create win/win business relationships - but honestly I could quit my high-income white collar job and bill myself out for snow shoveling and gross more income if people are paying these prices in the bids.  This is not hyperbole.

I get there is business overhead and insurance and travel time, etc. - but come on! My returns get really ugly if I budget for these exorbitant prices. I won't be able to scale if that's the case, which would defeat the entire purpose of hiring out.  I feel stuck.

The "best" bid so far for lawn care is $1750 for the 5 month season.  This was after I negotiated 3x month rather than once per week.  This amounts to 15 trips during the growing season.  And since I've done the work, I know it only takes an hour total to mow all three properties (again, including travel time between).  This amounts to over $100 an hour.  For mowing lawns.  And he wants ALL the money upfront.  Not to tangent , but is this a standard for industry?  Paying for the entire season upfront? My worry is, this is a new business relationship - if this guy sucks/is unreliable, then I have to go chase him down for my money....AND find a replacement.  Good grief!

Is this unique to my market or is this where we are with today's workforce?  Are the jobs somehow unattractive from a business standpoint?  The lawns are small urban plots on 3 properties within a few blocks of each other; no slopes or tricky stuff to mow around.  Little squares, nothing fancy.  I don't know what I am doing wrong.  Other investors I know locally either do it themselves (most) or they have a guy that "doesn't want any more work" or doesn't service my particular area.  And these guys are MUCH cheaper than what I am getting for bids currently.  The area I invest in is a gentrifying city, so there is plenty of work to be had for someone who wants this kind of work.  I have to believe the demand is there.  

Do these guys not want to get off the couch unless they are making $100K here in NY?  Am I going about it the wrong way?  (tried warm network/references, online sites like HomeAdvisor,Thumbtack, even Craigslist - ugh!)

I'd love to hear what other investors are paying for lawn care and maintenance, and what the PMs are charging.  I think hearing both perspectives will be very valuable. 

Thank you in advance and I look forward to the discussion!

[Corby Goade]

While your maintenance numbers are higher than what we see in our market, the problem is universal. When RE and rental markets are hot, that trickles down to all of the trades and building materials. Depending on the property, some times we just suck it up and pay for lawn care. However, with our rental market being very tight (2% vacancy, give or take) we usually just add to the lease that lawn care and maintenance is the tenants responsibility and that they need to figure it out. Sometimes they hire someone, sometimes they do it themselves and we usually have to send them a "friendly reminder" once or twice a season, but it can save thousands.