Transitioning from 3rd Party Management to Self Management

[Jake Didion]

I acquired a 28 unit and had 3rd party management take over the day to day right after acquisition to understand the dynamics of a new market to eventually take over sometime in the future. Come to find out the management directs maintenance calls to other contractors and of course the contractors only get paid if they do work so they will find something wrong 100% of the time. As you can guess the maintenance costs are over budget every month so far and the management fee are at 11%. Over the last couple months I have a made the connections to take over management myself but I am contractually obligated to have them on for another 10 months. I want to know from the experience of this community what I am in for by taking the day to day management on myself? 

Lessons learned so far:

- If you want to hire a management company to handle day to day, make the management fee be performance-based so it benefits both parties. Example: If they have a vacancy they get don't get the percentage of the vacant unit/units in the management fee for that month instead of them earning a fee on the entire portfolio size vacant or not.

- Make sure the company you are contracting to manage has people within the company to oversee the maintenance that needs to be done instead of having them contracting another company to do the work. The independent contractor will always find something to fix and it will cost you.

That's all I got for now. Cheers!