All Forum Posts by: Greg Weik

There might be some nuance that's being missed here.  

Your experience with a PMC will have a lot to do with the PMC - definitely.  

However, your experience with the PMC (speaking from our experience) might have more to do with your portfolio and your personal management style vs. your PMCs management style. If they differ, this can be a source of tension.

Our clients who care about their rental property condition, care about keeping great tenants in place, and who understand how this relates to their bottom line, tend to have an amazing experience with my company.  In that instance, our company and the client share the same philosophy and we're on the same page.  

Our clients who pinch every penny, do the bare minimum, and cut costs by trying to outsource work to their own vendors (who are usually flaky as hell), think they know better than us, and who insist on dramatic rental increases against our advice - those clients would probably say they don't have the best experience with our company.  

Same company, but a very different experience based on the client.  My advice would be to try to figure out what a company's process, procedure, and management philosophy is, as much as vetting them in other ways. 

I sincerely disagree with comments saying you need to "manage your management company" or "give them instructions."  Any client that tries that with us typically is shown the door. 

Credit. Show me an 800 credit score and I will show you the keys to your new home. 

We keep pet fees.  One time, non-refundable $250 per pet.  

It is very important to spell out in the management agreement, who can keep what fees.  Front-end communication usually can solve for problems like this.  I would say if it's not in your agreement, then pass the fee to the owner as the cost of your education.

Security deposits are designed to cover damage, whether from people or pets. Pet fees are fees - I disagree that they are designed to cover damage from pets.  What is $250-$300 really going to cover anyway?  Pet damage, if present, is typically considerably more expensive to address.

Who has to coordinate all the turnover work?  I think it's the property manager.  The landlord only decides to allow pets for 1 reason and 1 reason only:  reduced vacancy time.  So if the landlord is benefitting from reduced vacancy time, and the PMC ends up left with potentially more work at turnover, it makes sense to me that the PM can keep a pet fee. 

Ultimately, excellent tenants are also excellent pet owners.  We don't see move-out pet issues from tenants with high credit scores.  It just doesn't happen (at least not in my 15 years and thousands of turnovers.) 

The PMC keeping pet fees should allow the PMC to keep their management fees lower also (in theory, anyway).  If the PMC has a revenue stream from tenant's pets (and the tenants expect to pay a pet fee), those funds do not come out of the client's pocket.  

Another reason to have the PMC keep the pet fee is that increasingly - at least in Colorado - ESAs have taken the place of pets.  No fees can be charged, no restrictions placed on breed, size, etc. For any PMC that is dealing with ESA turnover, having them keep pet fees offsets some of that additional work for which they are not compensated (namely, ESA tenancy turnovers, where there may be animal-damage-related work that needs to be coordinated.) 

Just posting this again because it's the right answer.  PM already did his due diligence and legwork, and you have to be able to fire clients who do not share your ethics.   #gregwisdom  

@Elizabeth Schartman any of those unattended showing software programs are a terrible idea.  Check out my website blog to see a lot of detailed information on the topic.

It's commonly believed that there is "little money in rentals" for property managers.  I find that to be roll-on-the-ground hilarious, and here's why.

If you manage 500 properties at a $150/month management fee, I'm pretty sure that's $75,000/month revenue.  A month.  With hardly any overhead. 

So if a PMC has a new account or a vacant door that needs to be rented, they need to get their butt out there and rent that sucker!  :) 

The only business model that motivates a PMC is a model that takes commission out of the equation.  Showings simply have to be a sunk cost, something baked into the (overhead) cake, so they can send someone out to show properties as often as needed without any consideration for the cost to the company.  The problem is that most PMCs have a commission-based business model and most PMs are lazy.  :(  

Hi @Kelly Rao, we compete with Nomad in the Denver property management market, so I'm familiar with their business model. 

The short version is this:  If you're willing to pay (considerably) more for the security of guaranteed rent, they are probably worth hiring. Just keep in mind you are paying a significant premium for that peace of mind. 

My personal opinion is that a competent Property Management Company (PMC) will not need any gimmicks.  A competent PMC will simply rent your property to the best tenants -quickly- and they will charge a nominal fee to manage your investment property with competence. Your rent will roll in each month and you will be kept apprised of everything you want to know about (maintenance, renewals, etc.) 

There are a lot of gimmicks out there, such as eviction protection plans, free maintenance plans, etc. and Nomad is well aware that "guaranteed rent" sounds like a great selling point.  I tip my hat to their next-level gimmickry. 

The truth is, all rent is almost always entirely guaranteed.  A good PMC screens for and attracts the right tenants, for a much lower price. I say that as someone who has managed thousands of properties in a 15-year time frame.  It's exceptionally rare for rent to not be paid, especially to the point of having to file an eviction.  With Nomad, you're paying a lot of extra money for a guarantee that is not necessary with skilled and experienced property management combined with masterful recommendations for property condition; i.e. what a property needs in order to be rent-ready to the degree that qualified candidates will be attracted to rent the property. 

If it seems to be good to be true, it is. 

If you're shopping based on price primarily, the biggest differentiator will be company culture. What do the companies value?  

We pick up clients often from our competitors.  Those clients who shopped initially based on price or name recognition realize down the line, that other things were more important to their experience as a client of a PMC. 

Reviews are important, but the truth is far more nuanced in most cases. Many companies pay 3rd party reputation management firms to flood Google with 5-star reviews.  

Some examples of things that might not make it to a spreadsheet analysis:

-How do they treat tenants?  Any extra fees for paying rent online, maintenance requests, etc.?

-How responsive are they to clients?  Can you text them, call them, email them, and expect a human to respond or answer quickly?  Will that human have answers or will it be an answering service?

-How clear is their accounting?  This is a big one.  When clients have questions about their accounting, it seems that a lot of PMCs give the brush off or "we'll get back to you" and this can be a huge pain point when working with a PMC. 

As @Nathan Gesner said, marketing is a big part of this equation as well.  Have you looked at the marketing methodology and media used by each company?  I would assume they are probably very different.  Do they both do in-person showings, or does one or both companies utilize unattended showing technology?  What about video virtual tours?  Tenant application fees and "admin fees" for tenants to lease a property?  You need to know not only where they market, but how they respond to prospective tenants and how they conduct showings, as well as their screening criteria. 

California is a lot like Colorado.  It's easy to put tenants in a property (usually), but hard to get rid of them.  Marketing and screening are big parts of the puzzle. 

Hi @Juan Rodriguez, absolutely you can do it that way.  In reality, it isn't a new lease, it's an extension of the previous term.  

Inspect the property for any lease violations (and a clean AC/furnace filter) and if all looks good, send the tenants a DocuSign lease extension addendum that points to the original document and outlines any changes as well as the extension period.  

@David Siegel The only question you should concern yourself with is "are they qualified?"  If they meet your rental criteria and have a solid app, sure, why not cut them a small deal.  

In my experience, no tenant offers a full year upfront if they are qualified.  This type of offer is a major red flag to the professionals, and for good reason.  

@Brian Black - Good PMs don't need to charge an arm and a leg to deliver the goods.  Unfortunately, most PMs aren't good, and you pay for their inefficiencies. 

One thing to note, however, is that the quality of YOUR portfolio makes a big difference in terms of a PM's willingness to negotiate their pricing.  Keep in mind, that while you may be adding doors, it doesn't diminish the work-per-door your PMC is doing.  I don't know you, but if you are a difficult or needy owner, that could play a role.  

Quick anecdote:  Recently, a PMC came up on the market for sale in my area.  The PMC was slightly smaller than mine but had MORE THAN THREE TIMES the employees.  That same PMC could not compete with us on: -Price, -Marketing reach or marketing quality, -Responsiveness, -Any other deliverables.   They were, out of necessity, charging considerably more for their services, while being less profitable to boot. 

I hate it when people say "you get what you pay for."  That's one of the worst cliches of all time.  It gives cover to those who overcharge. My G Wagon was expensive but is a POS! 

Fees: 

-Tenant Placement: We charge $500 tenant placement (1 door under management) or FREE tenant placement (>1 door under management). We do advertise in the MLS @Drew Sygit, primarily because we benefit from the syndication channels.  We offer a $25 commission to Realtors who show our rentals (and many still show them!)  In fact, one just came across my email...

-Monthly: 7%, capped at $149 on the high end, $99 on the low end. 

-Annual fee $200 (1 door) or $100 (per door if >1 door managed). 

-No maintenance markups.  No fine print.  We've been in business for nearly 15 years now and we have hundreds of solid Google reviews.  4.2 overall. We haven't paid for marketing in years, but we still add over 100 doors/years.  It can be done. 

Sell your properties in Indy and buy in Denver, we will take care of you!  ;)