PM is own repair team & General Contractor, pros/cons

[Ben Simpson]

The PM company I use in Indianapolis employs a team of repairmen and handymen, and also will act as General Contractor when specialists are needed.

I'd love to hear back: is this common?, and what investors think about the pros and cons.

My experience with this specific team so far:

• pro: speed. the jobs are estimated and completed quickly
• pro: cost. the PM says the costs are very competitive.
• con: trust, all of the above pros are just what the PM company claims, I have very little checks in place. Things are not exorbitant when I look at the bills, but there is no third-party involved.
• con: bids, there are no bids, just a quote from the PM
• con: examination, the Property Manager wants me talking to him, so I don't speak with the repairmen to validate information

[James Wise]

Originally posted by @Josh C.:

Agree with @James Wise

Not way to get decent quality at a fair price unless it’s in house. With how busy the construction industry is right now everyone wants retail prices weather doing a nice 400k suburban home or a 40k rental. Only way to keep down costs. Plus when you get the 12 month warranty from your PM company you know they will actually fix the problem instead of some 3rd party contractor you don’t know and isn’t incentivized to come back and fix the issue. But yes you have to trust them and vet them.

 Funny thing about real estate sales and management is how much the investors cry about repair costs. They cry about repair costs more than any other aspect of the business. If you follow these forums you see thread after thread where investors are crying about this repair cost or that repair cost and accusing their PMs of taking advantage of them by over charging for this repair or that repair. Reason I think it's funny is anyone with actual experience on the sales and management side of the business knows that the repairs / maintenance side of the company is the most difficult aspect of the company to run and it comes with the lowest profit margins. 

Keeping this part in house isn't done by the management company as the primary revenue generator. It's done as it's the only feasible way to keep the rest of the operation moving smoothly. Believe me folks if your management company could simply outsource all of it while snagging a small fee for coordinating it they would. However everyone who can swing a hammer is calling themselves a contractor and that just isn't the case so it takes a lot of work and over site to ensure these jobs get done right 100% of the time.