All Forum Posts by: Greg Weik

Depends on the PM more than it depends on your property or what you're willing to do. 

For example, a great PM is going to know the law, the market, how to screen and evaluate tenants, have the best lease possible, the best way to reach prospective tenants, they're going to have the best vendors possible (who usually are willing to do more for a PM than they would for a private O), they're going to have the best systems, and they're going to be a lot faster and more efficient than you could hope to be because they have processes, systems and checklists for everything.  They're also going to reduce or nearly eliminate the turnover time between tenants, which is the major killer of cashflow. 

Great PM makes clients more money than they save by DIY management.  On the other hand, most PMs aren't great - but many are decent.  

If I didn't own a PM company, I'd hire one for my rentals - that is, if I could find one anything like the one I run.  :)

It's typical pricing/services, but also too expensive IMO.  Also it looks like they "in-house" maintenance, which is another profit center for them at your expense.  If a company has in-house maintenance, they are far less likely to try to walk tenants through basic troubleshooting - they need to keep the maintenance division fed.  

I'd try to find a reputable company that charges less and doesn't have revenue streams at your expense, such as maintenance.  Also, find out what fees they charge tenants - this can be a big one when it comes to getting units rented and keeping good tenants. 

I'm not sure where they're marketing that it costs you an average of $150/month. Zillow is $9.99/week/listing and most other sites are free, such as Facebook Marketplace, the MLS, Craigslist, etc. Seems to me they should eat that cost - it's another revenue stream at your expense.

Good luck!

Hi @Adam Knickelbein, we manage properties in Boulder also and I think the advice in this thread is spot on. 

I did want to add, that when you're listing a property in the winter, plan on going lower to get it occupied and plan on raising the rent to market level at lease renewal - in the summer.  We always end leases May-July/August, so when we're taking on a new winter listing or if we have a winter lease break, the initial lease period just has to end in the summer (this summer or next.)  

The idea basically being that once you have the property occupied and rent coming in, you also can use that last 30 day period of occupancy to re-list at a higher rate if your tenants are not going to renew.  Don't hold out for top-of-market pricing in February. 

Also, you don't need to pay for professional photography.  You do need better pictures though, especially the exterior.  Also, the photos should be ordered exactly in the most compelling way - exterior, kitchen, most attractive features, etc. Lights are not on in all your shots and you really need a wide-angle lens.  If you have an iPhone 11Pro Max or newer, they take professional-level photos.  Zoom out, crank up the "brilliance" and you are off and running. 

I like your pre-screening - this is really important.  But don't tell tenants your minimum credit score, just ask them what theirs is.  Ask them when they're moving, what their combined gross income is and what their credit score is and if they have pets. You'd be amazed at how forthcoming people are about this.  Even with these changes, I think you're a little high at $3195, especially for February.  

Good luck!

@Patrick Parker we manage about 500 doors and we require ddls (digital door locks) on all of them as long as it's permitted by the HOA and feasible (some older style/antique doors cannot accommodate a DDL.)

I recommend something like this because there is not a motor to turn the deadbolt, which means the batteries last longer.  These ddls do come with a master key as well, in the event the lock fails.  

We've been using them for about 6 years now with only a few small issues. Not having to chase key copies or deal with broken keys, lost keys, lockouts, etc. leads to the kind of efficiency we value :) 

Just keep track of your programming and user codes and change the codes at turnover.  Also nice is that you can give vendors a one-time use code, delete codes if you need to, etc. 

Hey @Kayla Givens, unfortunately, I don't know muich about Airbnb.  And you're very right, there's always another!  :) Good luck! 

Hi Kayla, 3% down is usually not possible for an investment property, so you are asking where you should buy your primary residence?  Just trying to make sure I understand. 

If you're planning to live in the home and rent it out in the future, the area west of 25 and south of 6 isn't too bad.  We manage a number of properties over there and they do pretty well in terms of stable, long-term tenants.  Appreciation should be decent in that area as well. 

My advice is generally to shoot for a single-family home if you can swing it.  The area you're looking at doesn't have any HOAs, so that's also a plus when investing.  $365 definitely isn't what it was 10 years ago!  I'm sure it's a frustrating process for you to find a property.  If you are open to different areas, Englewood tends to be strong, and so does Littleton.  Parts of Aurora would be great for your budget too.  Even a small single-family home is a great place to start.  

I'm guessing you're working with a Realtor.  If you're not, my very strong advice to you as someone who wants to become an investor is to get your real estate license.  It's pretty easy, doesn't cost that much and you will be paying yourself $10,000 back on that first home.  (2.8% of $365k) That's a lot of money to walk away from, IMO.  

As a Denver area property manager, I really like what @JD Martin suggested. But it sounds like $500 plus the security deposit, however much that is, that would be forfeited. 

It sounds like there may be lease violations that could be enforced by the current PM company, regarding the upstairs tenants. Most likely, the smoking on the premises could be proven by the downstairs tenant and sent to the PM company and the PM company would have an obligation to enforce the lease (assuming smoking inside/on the premises is a lease violation.) 

When does either lease end?  If they can stick it out until the end, they can avoid losing their deposit + $500.  

We manage about 500 doors around Denver and are expanding into Colorado Springs as well.  We added about 100 doors in 2020 without spending money on marketing - it was just referrals and word of mouth and existing clients expanding their portfolio.  We just started the expansion into CO and are closing in on 10 doors already (it's about an hour south of Denver.)  

We previously had a satellite office in Jacksonville, FL that we operated for 9 years before selling in 2017. 

We've been in business since 2008.  No investors, no partners.  Just my wife and I and now 3 full-time salaried Team Members.  I work about 20 hours per week, my employees work 40.  We're not going anywhere.  We've actually dropped our pricing over the years while increasing our service offering.  

-We dropped from 2/3 month tenant placement fee, to free tenant placement. 

-We dropped from 10% management fee to 7%.

-We changed from 7% across the board to $99 min and $149 max, and this appears to be the sweet spot. In fact, I just took on a $3500/month property today and that owner will be paying us effectively 4%. 

I will let you figure out the math, but with 500 doors, averaging about $135/month/door (not including other revenue streams: we keep pet fees at $250/pet, we keep late fees at 10% of the rent, and we have a $100 annual fee per door on 1/1 each year), I personally bring home about $.60 on every dollar of gross revenue.  

We are legit.  We have solid Google reviews, including a response to each and every negative one (there aren't many, but you know how some people are..) and we've been randomly selected for audits twice.  The auditor the last time told us she wished more people like us did property management. 

Oh boy, here we go again.  

Yes, most landlords lead their search for a PMC by focusing on cost.  The assumption is that PM is PM, basically, it's the same with whichever company you hire.  

I think this is basically true, with the key differences (other than arbitrary pricing differences) really being on execution. There are a few ways landlords can lose money on a rental:  1) Vacancy time.  2) Bad tenants/bad move-outs/tenants who pay late.  3) Overpriced repairs or repairs exacerbated by an incompetent PM. 

Being excellent at 1-3 above doesn't cost more money for the PMC. It requires outstanding systems, process,es and company culture. Therefore, it doesn't need to cost the landlord more to hire a PMC that excels at 1-3 above. This is PM ROI in a nutshell.

It's all about ROI. Good PMs understand the necessity of speed and accuracy in PM. Prospective tenants need immediate responses, so they don't rent something else. Repairs need to be managed effectively and with systems that are foolproof. Marketing needs to be excellent. Responsiveness to clients needs to be excellent.

Company culture needs to reward integrity and competence.  Hire smart people, pay them well, keep them as career professionals. 

Beyond all that, you also need legal expertise.  Many PMs fall short on this because it's not technically required to go out and do PM. 

We could make a case for charging the most in the industry, but we turn that on its head and make the case for charging the least, while still offering the most. 

At the end of the day, taking on a new door as a PM is just a guess.  How much work is this property going to be?  Is it going to have a lot of repairs?  Is it in an area where it's easy/hard to attract qualified tenants?  What's this landlord like - are they going to call me every day or week or are they going to be hands off?  As a PMC, you have to evaluate the TIME suck of each door you add on, and you have to train the landlord and tenants and vendors on how to interact with your company in a way that works for everyone but remains highly efficient.  

@Steve Wilmers I would never sell a single-family to buy a multi-family.  Not in a million years.