How to verify your Property Manager

Question

Hi. My tenant recently notified me of a leak in the roof after some recent rain. My property manager went to check and says that the roof will need to be replaced. The property is 1025 sq ft. single story, 3 bed 1 bath in Missouri and the work will cost around $5000. From doing a quick check $5000 seems pretty fair.

I'm out of state and have not seen the property for a few years. I've had my current PM for at least 5 years. The only problem I have with them is their accounting software and communication can be better.

Whenever the PM say that a repair needs to be made, there's always a voice in my head asking "what if they're lying?" I haven't replaced the roof since I purchased. So it really may be due. But how do you know?

I'm sending a separate roofer to come and inspect. Is this bad business etiquette? I just don't want my PM to take advantage of me being out of state.

I need some tips on managing my manager. How do you other out of state investors verify the repairs that your PMs say need done.

Thanks

Raad Qumsieh · Answer

@Philip Calixto

I live in Missouri, but you have every right to double check on your PM and there is no problem sending a roofer there to double check for you. After all, this is your business. I had a cousin investing here from AZ and their PM screwed him multiple times that he has to sell his 4plex. Good luck! And let me know if you need any help out here.

Nathan Gesner · Answer

Your property manager shouldn't be making decisions like that unless he happens to have expertise as a roofer. Just because it leaked doesn't mean it requires replacement. What if it's just a single bad shingle? Or a seal around a vent pipe?

Have a professional look at it before going to replacement.

Kenny Dahill · Answer

@Philip Calixto, have 2-3 roofers look at the roof and provide you a quote.  Roof leaks can be tricky because where water enter and appears can often be different locations.

Shingle roofs will last 20-30 years.  Yet the caulking on penetrations for pipes, filters, AC, etc. go bad much after.  Hopefully it is as simple as recaulking roof penetrations.

Does your property manager earn a percentage of maintenance work?  What will their earnings be on this?  Roofs are expensive repairs but simple coordination.

Ujwal Velagapudi · Answer

Definitely a tough position to be in, @Philip Calixto! I purchased a multi-use complex that I had professionally managed even though I was just an hour away, for the simple fact that I needed to learn how to manage a PM.

I have in my contract that the PM must get multiple bids, so this should address most of your concern. A PM should tell you what's going on, your eyes and ears, but if you let them do all the work themselves then they definitely may be taking advantage especially since a lot of them do mark-up costs. If you are worried that your PM has a network of frequently used vendors (which most tenured ones will have), I have addressed this concern by requesting them to use a vendor that I had found. I would do my own research and find 1 or 2 good vendors, speak to them, and then let them provide the estimate. In the past on big roof jobs I've usually gotten a handful of quotes (commercial flat roofs), and the more the merrier since they are free estimates.

I have also asked for pictures and/or videos for major items, especially basement leaks, roof leaks, misc. damage, etc. If you have been using them for 5 years, they may have gotten complacent and taking your account for granted. You should be a bit more in their business, micromanaging in a respectful way to ensure that you will step in if you feel something is fishy. Then you can ease up after, but periodical and random intervention to check up can keep them on their toes to make sure they are not being lavish in their capex/maintenance requests and working for the investor.

Philip Calixto · Answer

@Nathan G. Yeah that's what I will be doing. A roofer will be going there in the next couple of days to check it out for a free estimate.

Thank you everyone for your input.

Mike D'Arrigo · Answer

@Philip Calixto In my opinion, it's smart to have a roofing contractor look at it. PM's are not contractors. It could very well need to be replaced. Depending on the type of roof, patching is not generally a long term solution. If you want, DM me who the property manager and I'll let you know if I know anything about them. There's a couple in particular that have a reputation for doing unnecessary repairs.

David Ounanian · Answer

Hi @Philip Calixto I'm an investor and agent in St. Louis.  We had really bad storms and wind damage here Sunday evening.  Might be worth checking with contractor that works with insurance adjusters.  I can recommend one here locally if you need one.  Let me know.

James Wise · Answer

When in doubt you can always call in a 3rd party to look at it. Although, this one is pretty simple. I imagine you got an inspection when you bought the house 5 years ago? If the roof was that close to end of life I'd imagine the home inspector discussed it in the report.

Max Householder · Answer

Unless your PM is a roofer, you should definitely get multiple roofing companies to inspect and if the roof does need replacement, get multiple bids. $5000 sounds about right for a small SFR, before we sold our house in St. Louis City (1,000 sqft, 2/1) we got a quote for the roof and it was around $4k IIRC not including the garage. Still, definitely get an actual roofer's opinion. Plus, they're probably eager for work right now to keep their crews busy so you might get a deal!

Your PM can likely be helpful to ballpark items like this if they've been in REI for a long time, but I definitely wouldn't give him $5000 and let him find the roofer and manage the job etc.

Michael Robbins · Answer

I would start with verifying your property manager is currently licensed.  Next, as it relates to the roof, the property manager should not be stating the roof needs replaced (and maybe her or she did not).  But instead the PM needs to provide you with the estimate or paperwork from the roofer that said the roof needs replaced.  Also, make sure any vendors the PM uses are licensed and reputable. The worst situation is when a contracting issue goes wrong and you have limited recourse with the State contractors board because the vendor was not licensed to begin with.

How to verify your Property Manager

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