All Forum Posts by: Greg Weik

 ^^ This.  Same path I'm on.  I own a PMC but my rental properties are managed by the PMC the same as all the other clients.  I pay the fee, I let the company run its processes. My rental homes are all in LLCs, so my Team usually doesn't even realize if they are working on one of my properties.  No special treatment.  This allows me to evaluate our company systems more from the client's perspective. 

Even if I didn't own a PMC, I would hire one for my rentals.  Time is the asset you never get more of. 

 What you've described sounds like probably most client/PMC relationships.  What you're describing sounds to me like a problem with systems and probably not people.  Usually, the people at the PMC want to do a decent enough job, but if the right systems are not in place, they cannot consistently deliver. 

Also, it's important - as others have said - for you to understand the dynamics at play.  Let me use one of your examples to explain what I mean:

HVAC Tune Up:  Now this is something the tenant did not request, so the tenant probably doesn't care that it gets done.  This means that the PM can create a WO and send it to the HVAC company, but then the PMC has two options: 1) Trust the HVAC vendor will schedule with the tenant and get this done and send the invoice or 2) Set a reminder to follow up on this every day until it's done.

Now, if you're in PM, you can see that #2 above probably costs money and has a low ROI. The only party pushing to get this item done is you, and there is just not pressure from any other side for the PMC to continue to follow up with this. The way I see it, the PM in this situation is really relying on what is probably a 3rd party vendor, to be organized and get it done. I know we have a really good HVAC vendor who is extremely organized (part of why we like them) but in reality, this is more the exception than the rule. So if the PMC is expected to do #2 in my example above, how many other situations like your HVAC tune up are they setting reminders to follow up on? This could be an entire 40 hour/week payroll position if this is what they are doing.

Turning off the exterior water before winter (maybe this means disconnecting hoses?):  This is one where the PMC absolutely should have a reminder set and ensure it happens.  

At my company, we do have a task called "following up with open work orders to ensure completion" - but the truth of the matter is, that this is lower on the daily priority list than many many other tasks.  It has to be.  We strive to be the best company in the world, but the nature of PM is that we deal with thousands of micro-transactions every single day, and we have to determine triage on those items, even with great systems and checklists. 

TL;DR: I think you should set communication expectations with your PMC and make sure you guys are on the same page! 

@Anthony Hidalgo, I'd be happy to chat with you and at least help to point you in the right direction.

You can do PM yourself - many landlords do.  But like a lot of DIY projects, it may seem "fine" until it's completely off the rails.  There is so much legal knowledge you need to acquire -the laws are changing faster now (at least in Colorado) than I've seen in the 15+ years I've been in PM. 

I'm also a USAF Veteran and I love our military clients.  My company currently manages about 550 doors between Colorado Springs and Fort Collins and we are poised for considerable expansion into the CS area (I think we are up to about 30-40 doors down there now.) 

Anyway, let me know if you are interested in some help.  I'm not a sales guy, but I can tell you what my company can/cannot do to help you.  If you're considering getting into PM when you retire, the stars might just align, because I plan to have a healthy number of doors and a need for a satellite office in the Springs.  Maybe you could work for us or buy our doors and take them over.  :) 

 Hi, @David Williams are you looking for yourself personally or someone else? 

I'd be happy to chat with you about what we can offer at RES.  I believe we are the best in the business, and we do serve the Denver area. 

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.