Cheap PM - Should I Fire Them?

Question

Hello,

I live out of state and need some work done on one of my properties. The property management company is telling me that it would cost $45 to have someone go out and meet the contractor there to give them access each time. It would be at least 3-5 times over the next few months.

Am I wrong to think this is a really cheap move by my property manager? All I need is them to either:

1. Leave a lockbox there for a couple days

2. Go and let the contractor in if the tenants aren’t home

Don’t see how this should cost anything let alone $45. I was recently charged $45 for them to take photos of the water heater I’m having replaced.

The property is in a large neighborhood with plenty of other rental homes... not a far trip by any means

Hello,

I am looking for advice about using a lockbox for a property. I live out of state and need some work done on one of my properties. The property management company is telling me that it would cost about $45 to have someone go out and meet the contractor there to give them access each time. It would be a 3-5 times over the next few months.

Am I wrong to think this is a really cheap move by my property manager? All I need is them to either:

1. Leave a lockbox there for a couple days

2. Go and let the contractor in if the tenants aren’t home

I’m feeling a bit nickel and dimed of late and imagine my tenants do too. Recently, I was charged $45 for asking them to take photos of the water heater I’m having replaced.

Should I fire them and hire someone else? Should I just install my own digital lockbox? Those cost about $150 online. Not sure how safe that would be

Drew Sygit · Answer

Have you considered that you might be being cheap and short-sighted as the property owner?

As several above pointed out, time is money.

Your PMC is NOT a servant at your beck and call. Their time is of value. Property management agreements are designed, so that PMC's can actually make money from their time & efforts. Anything NOT covered by the agreement is negotiable and typcially an extra charge. Yet, property owners consistently think EVERYTHING they want should be included.

How many property owners would agree to consistently work extra hours each day and weekends at their day jobs with no additional compensation? Even if you are forced to do it and begrudgingly agree, how well do you then perform while looking for another job?

If you want your PMC to meet the contractor you hired at your property, then you should be expected to be charged for this. If it's a once-in-a great-while occurence, then maybe your PMC might not charge as a favor.

It's no different than when an owner chooses to list their rental property for sale with another real estate broker and then expects the PMC to set up showings with the tenants for this other broker - for FREE. How fair is it to expect the PMC to spend their time for free helping another broker get a commission? We've even had to explain this to other brokers when it happens, as they too, think a PMC should do it for free - until their faulty logic is explained to them.

As also pointed out above, if you had hired the PMC to handle the project and they were charging a markup (which is often sadly, hidden), then their fee should cover incidental issues like contractor access and monitoring.

ACCESS LIABILITY: For those that mentioned just installing a lockbox so the contractor can enter a tenant-occupied home whenever they want - what liability issues do you think you are failing to consider? There's no way as a PMC that we would allow this to happen! If anything goes wrong in the sue happy US of A, the PMC will be included in any lawsuit and at best, has to pay attorney fees to get out of the lawsuit.

Steve Maginnis · Answer

@Bret Habura, I think the underlying issue is poor communication with/from your PM.  That is the number one reason why Landlord's leave their manager.  If they had better communication with you, the two of you could likely come up with a win/win solution for the contractor situation.  If they had communicated better with the tenant, it could have saved you $90.  I think if you have a conversation with them and spell out your concerns, maybe they will understand that if they do not improve their communication, you will find another management company.  Unfortunately, the "squeaky wheel" theory holds true.  Best of luck.

Steve Maginnis · Answer

Hello @Bret Habura

I personally do not feel the PM is too far out of line.  I don't feel it is the PM's responsibility to arrange entry for your contractors every time they need to go in.  Just as there likely is no provision for charging this in the management agreement, there conversely likely is no provision stating this is one of their duties.  I do not understand why they could not place a combo lockbox on the property.  For our occupied properties, contractors need to schedule with the tenants to be there.  Tenants need to make themselves available during normal business hours to allow contractors inside.  Or alternatively give us authorization to send a key with the contractors.  Did they say why they can't place a lockbox?  I like to work efficiently, and this is terribly inefficient.  Time is money and I would not want an owner to expect us to drop what we are doing to go let contractors in a property for no compensation.   This also goes for taking a trip to the property to take a photo of the water heater.  Why can't the tenant take a pic and send it to the PM?

I also agree with the work order to replace batteries in the thermostat.  A contractor's time is money too.  Just because you can get a four pack of AAA batteries for $7 does not mean that is what the job should cost.  Most contractors in our area charge a minimum service call fee of $75-90 on top of any service provided, or absorbed if over a certain amount.  Even with no service call fee, there is drive time there, to the store, back to property and back to office.  Truck expenses, insurance, and other overhead they have to account for.  Did they diagnose the system to determine the issue?  Did they have to go to the store to buy new batteries?  If the tenant submitted the work order stating the thermostat is dead, the PM should have asked if the tenant replaced the batteries, and if not, to try that first.  PM's should know what steps they can direct the tenant to take to correct minor issues.  Thermostat batteries should be a tenant expense in my opinion, just like other expendables such as light bulbs, HVAC filters, etc.  I hope this helps explain.  Best of luck.

Theresa Harris · Answer

Is there someone living in the house?  Surely a tenant would just do it.

The ideal situation you described is how it should work-quick troubleshooting with the tenant over the phone for something that could be as simple as changing a battery.  Less work for everyone and saves the PM time.

I'd ask for your tenants contact info and see if they can talk to the contractor directly-maybe the contractor can get their contact info.  The tenant needs to be contacted anyhow for visits, so why not let the tenant and contractor deal directly with each other?  It saves the PM (and everyone) time.

Joshua Adlam · Answer

Honestly speaking as a property manager myself in my opinion it is a cheap move. I believe this is the difference in working with property managers who understand real estate investing and the investors mindset vs those who don't. For the future reference I'd find a property manager who actually invest in deals of their own and will go the extra mile for you with no hesitation. For any property they manage for you leaving a lock box or letting someone in should not be an extra charge whatsoever

Julie Hartman · Answer

@Bret Habura What you are describing sounds a bit strange. Was any of this outlined in the management agreement? If not, then I would be shopping for a new PM. I can only speak to how we handle such things but I don't think it's customary to charge that much for battery replacement or to charge for anything without prior notification to the owner. We don't like our owners to have unpleasant surprises on their monthly statements.

Matthew Irish-Jones · Answer

@Bret Habura. All the things you are asking for

Cost money.  Every little task takes time from the office to take your request, schedule the appointment, arrange the keys and then send a tech out to let the contractor in.  As well as communicate with the contractor.

If it costs the PM company money they have to have a billing line item.

How many accounts do you have with this PM?

Add up your rent collection fees.  Some places rent for $900.  That’s $90 a month to the PM for managing, that is not a lot of revenue.  Most PM’s cannot afford to have techs in the field doing work for free.

Steve Maginnis · Answer

I agree with @Drew Sygit  If the home is occupied, a lockbox is not the best way to handle.  I was thinking it was vacant at that time.  Tenant's should be present to let contractors in during business hours. I know it is a pain for many.  Our work order requests have a box where tenants can check if they are okay with contractors going in when they are not home, and we do our best to abide by this.  Why can't the contractors go by the PM's office to pick up keys every time they need to get in and drop off afterwards, if tenant agrees?  At least they are being paid for doing the work.  Of course, make sure your contractors are all properly vetted and have the appropriate insurance.

Joe S. · Answer

So far I have only work with two property management companies so I am not inferring to be an expert. IMO Most property management companies have a couple of preferred handyman/contractors that they work with. Let the property manager oversee getting someone out there to change the hot water heater. Even with their little bit of mark up fee they might can get it done cheaper than you can get it done yourself without their mark up. If the PM does not have handyman and contractors that they use on maintenance calls I would definitely be surprised, because that is part of the overall management. Property management companies do more than collect rent from my experience. If you  step up to the plate and take over this project then they might be happy to let you do so, but you might want to put things on their shoulders going forward. They should be able to handle it.

I hear your pain about the batteries in the Thermostat, But how would a PM know what the problem was to tell to the tenant what to do? If you buy any more properties consider a different property manager if this one is just not working out for you.

Bret Habura · Answer

@Steve Maginnis I understand the need to charge for work and am certainly fine with that. I do freelance work myself and know all the time that can add up. My biggest frustration is the inefficiency & carelessness of it all, which you’ve alluded to.

I don’t have any way to ask the tenants to take photos of the water heater so email PM for help. Sure, I could be more clear with my PM but I think this is basic.

Current Situation:

Tenant raises flag about lack of heat -> PM immediately sends someone out to fix the issue for $90

Ideal Situation:

Tenant raises flag about lack of heat -> PM has them change batteries first, then sends out technician.

Cheap PM - Should I Fire Them?

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