Managing PM's: Questionable Repair Charges

[Mike Welch]

On my recent property statement, I've noticed a charge I think looks ridiculous. I'm wondering how experienced property owners who work with PM's would handle this matter.

I acquired and rehabbed my first property in July, 2011. I then put the property under a PM as I am an out of state owner. I built a good relationship with the principal PM who was managing my property and kept in regular contact with her. Last month, she informed me she was leaving the PM company due to health issues and that another PM would be taking her place.

On my first invoice under the new PM, I see a charge for $100. They included an invoice from an electrician that states the contractor was dispatched to the property to reset the circuit breaker.

A good electrician in the town where my property is located will provide service for $50-60 / hr. I can't imagine, even with drive time, that the reset of a circuit breaker would take two hours of an electrical contractor's time. I'm also wondering why the PM wouldn't diagnose this as a flipped circuit breaker given the 'symptoms' of the situation. Couldn't a much less expensive handyman been sent out on such a call?

I've sent an email questioning the charge. I'm currently in the market for additional properties (btw, finding the same buying conditions all of you are experiencing with tons of first time home owners and investors competing on every listing), but I'm now questioning if I'd trust this PM with multi-family properties.

How do you handle situations of questionable charges you find in your PM's monthly bill?

Thank you in advance for your responses!

[Kevin Kaczmarek]

If they do not respond to your inquiry in a professional and detailed manner I would immediately seek a new pm firm. That might be harsh, but if you are already starting to feel the up-charge and lack of communication from your new contact, you need to make a change before it costs you more. When I entered my new market I hired and fired 5 PM firms in less than a year. We now do it in house because of our volume, but I know if I were in your situation, I would want to make sure someone was putting my financials in their best interest. That to me is a very questionable charge. That really is not a maintenance issue. Depending on the state of your property, the tenant should be required to pay bill.