Property manager that doesn't profit when things go wrong .

[Sharon R.]

So if you read my previous post regarding the terrible PM i had you must 

know that i had my share of terrible PMs who know only to collect the 

rent and their fees and nothing else. 

So I was fed up with it. 

I started to interview a few.  I have one for my investments in Vegas so I was 

basically looking for a PM for my Atlanta's SFHs, 

I talked to a few. some sounded nice, some were vain enough to say that 

700$ house is not in their range, but if I give him all my hpuses in Atlanta to manage

then he will take it. I heard that from a few of them. 

but that wasn't what had really set me off. 

so they take 10% of rent income, some of them were willing to negotiate to 8% if I was

to give them the other houses as well, 

10% service if something breaks and he/she needs to go fix it, (10% or min service 

fee of one visit is 35$) 

one month rent for finding a new tenant (even if tenant only stayed for 2-3 months) 

1/2 a month rent for renewing an existing lease with the same exact terms! 

and more and more "pay for this, pay for that extras" 

when I said "but If I pay for each time there is a service call, or every time there is a need 

for changing a tenant and having them resign a lease... then what is the managing 10% fee for?!!!

they all answer with "this is for managing..." 

"but, but.." i said "you just specified all the things you do and how much are they 

going to cost me. so what is managing?" 

and they all "remembered" - yes, for collecting the rent and distributing it to you 

"so what you are basically saying is that i am paying the 10% fee every month to 

have you collect (which is in most cases done by an automatic setup with an automatic 

draft from the tenant's bank account) taking out your fee and making me wait another 5 days 

to have you send what's left of the money?" 

they all said: "you can put it this way if you want..." 

but this is what it is. 

they all hated to hear that. and why won't they? they got used to a standard of charging 

a basic fee for nothing. 

I hated it. 

I found a really intelligent woman, who had experience in real estate, (as a broker) 

and who had done these kind of things for renovation process and who had just finished 

her property management class. I offered her this deal: 

I give you not 8, not 10% of the rent, I give you 15% 

but... it includes everything. 

if all goes well, for a 900$ rent you get 1620$ a year (135$ a month) but if the house is 

vacant, you loose that month, so the 15% is of 10,800 minus the months it was vacant. 

there were more stipulations to this contract which basically makes her want to take care 

of the house like it was her own. 

If you are interested i be more than happy to show/ tell  you. 

I thought I should share this with you because it can really help set things right 

making both sides with the same interest.

[Robert Gilstrap]

Not to be disrespectful Sharon, but you have an incredibly skewed misunderstanding of what real estate management entails and this experienced real estate person who just finished her property management class I fear is about to get a great education in how not to conduct business.

I laugh when I hear owners who think that a manager should share in the losses of the owners investment. Do they get to share in the upside profits when you sell? Do they get the tax advantages, if they save you $500 on a repair what percentage of that are you giving them? Nothing right?

You are the owner of the investment. You bought it and you get the good with the bad. If you don't want any bad then you are in the wrong business.

You seem to have a mistrust of all property managers (perhaps justified) and the entire system in which they operate. I could go point by point on everything you've said but the reply would be pages long and I don't want to bore anybody. That being said if you want to see the value a Professional Manager can bring then read this Google Doc I put together. It's not polished or anything but worth the read.

Property Managers take on a huge amount of risk and liability and a good manager will save you far more than you ever pay them in fees.