All Forum Posts by: Account Closed

Here is a good starting point:

1. How long have you been in property management?
2. Are they licensed real estate agents? (To manage property legally in Georgia, you must have your license many other states are the same.)
3. Do they only manage property, or do they also operate as a real estate agent in sales?
4. How do they ensure they follow all fair housing laws and stay up to date on changes?
5. Are they also an investor? (There are good managers out there who now own property, but this is still helpful to keep in mind.)
6. What is their screening process? How do they determine who they will lease to?
7. What lease paperwork do they use? Are they confident the paperwork is sound?
8. How do they determine the rate they will lease the property at? How do they decide what they will renew the property at each year?
   1. How do they determine what renewal rate to offer?
9. What do they do if a Resident is late on rent? What is their process?
10. Do they make sure they use only licensed and insured vendors?
11. What are all their fees? Be sure there are no hidden fees.
    1. Monthly Management 2. Lease Procurement 3. Renewal Fee 4. Other fees
12. How will they communicate with you and provide updates/reporting?
13. How will they transfer money to you each month after expenses are paid? (Check, electronic check, etc.).
14. By what day do they ensure they will transfer funds to you?
15. How many clients/investors do they work with, and how many units in total do they manage? How
16. Many employees do they have?
17. Do you own all aspects of the operation? (or do they hire third-party companies)?
18. What is their average vacancy rate?
19. What percentage of residents typically renew.
20. Have they ever had to ask a resident to leave or evict anyone?
21. How do you approach customer service with residents?
22. What percentage of residents pay late each month?
23. What has been your biggest mistake as an investor? How do you protect your clients from making the same mistakes?

Aside of that, ask for multiple references. Once you choose one, communication is key. Ask them to overcommunicate in the beginning and you can lay off as you build trust over time!

I hope that helps.

Is the resident asking to purchase and then expects the owner to reimburse him?  If this is the case, tell him no.  You do not want to give control to the resident to select a replacement.

If the resident is offering to purchase and remove when they move out with no expectation of reimbursement, then it's not necessarily a problem.  If this were my resident, I would tell them I expect to put the old refrigerator in the garage (or somewhere secured, inside, on property that it will stay plugged in), and they have to allow a vendor to come in to fix it.  This way, it will be working and ready when you release it to a new resident someday.

If they have food that went bad, I insist residents take pics of what was damaged and then provide a receipt for the replacement items.  (Up to a reasonable amount).

I hope that helps.

Mike, I apologize, I am slow to respond, I was out of my office this past week.  I agree with everything Michael said and have one addition.  Once a budget is in place and agreed upon, I have negotiated with clients to bonus back a small percentage of the savings when the project is completed.  All other contractual obligations must be met to receive the bonus.  This has worked well for me when I have been on both sides of the deal.

This may not be directly related but I think it is important.  If you are not local you want to be sure you have somebody representing YOU.  Managing on your own from afar often seems like a great idea because of the cost savings but you will find even the best contractors may cut corners if left unchecked.  Pictures leave out a lot and contractors will only send you pictures of what they want you to see.  Time and time again I have seen examples of work being managed from afar and the investor has to fork out money to fix something that was either not completed correctly or at all after the fact.  Again, many contractors have the best of intentions but if they are on a tight budget or timeline they will make decisions differently if you are not physically there constantly to check their work at all stages. 

Hiring an owner's rep to manage work typically costs about 10% of the project cost and a true owner's rep will have a strong contract to ensure you both are aware of what your respective responsibilities are.  I have a lot of experience with all three options you mentioned above and I am happy to answer any questions you may have and offer free advice if needed.  Feel free to message me.

Just remember, do not leave the fox in charge of the henhouse, even if the fox seems reliable!

This is a loaded question. Here is my short and sweet answer.  I hope it helps.  

Tip: At seven doors, you should be able to negotiate a nice discount for multiple properties under one manager.  

Two critical questions:  What is the opportunity cost of managing your properties versus generating revenue somewhere else.   Are you willing to give up a large amount of quality of life now to save money on a PM, or are you able to pay a PM while still making a good return?

I could go on and on, but this is where I would start when considering this question.

Josh, welcome to the community!  This is a great place to come to for support and advice.  I would love to chat with you about the Atlanta area if you are interested.  Please message me and we can discuss offline.

Self-managing is a lot of work, but it is the best way to maximize profits.  If you know what you are doing, go for it!  I have friends who successfully manage their properties and live out of state from the properties.  If you do not have the experience and try to manage ,independently, you could stand to lose more than the 8% management fee.  Property Managers usually have a pocket full of quality vendors who do it right the first time quickly.  A downfall with managing on your own is that it's harder to build up a list of quality vendors and vendors that will come out immediately.  Residents expect service quickly; it becomes a customer service issue which equals no renewal if service takes too long or is not completed properly.  Another bonus with Property Managers is that they often have negotiated better rates, having said that, be sure they do not upcharge on work completed.  Property Managers also have an eye for risk management; they will notice things you may miss that could cause more expensive problems with your home down the road or, even worse, a lawsuit.

On another note, if you are moving out of town and plan to use a property manager why limit yourself to Allentown?  There are some great markets to buy in for investment properties that will provide you with a better return.  If you find a good agent to help you source a property and have a quality manager lined up you never even need to go to the market.  Biggerpockets is a great place to build a team to help you.  I have seen a lot of investors buy in Atlanta that have never stepped foot in the state, they even complete major renovations via their local support team.  Something to think about.....

Keith,
The question is, do you want to be bothered with it while you are away? You want to have someone inspect the home between each stay to ensure damage is noted, repaired, and charged back to the guests. What if a vendor does not show up? What if they do not do a good job? Do you want to have calls from guests? There is a lot that goes into it. I have seen people successfully manage their homes from afar, but it takes a lot of time and effort. If you would like to enjoy the passive income, I recommend hiring a full-service company.

I agree with Scott you are not asking too much.  They will never be able to set up most utility vendors with paypal so this is a big problem, they have to have a work around.  I am curious if this is a new process for them or are they a new company?  Perhaps they do not realize that utility companies will never go through the steps to do this and most vendors will not either.  I would push back and insist they handle this.  In my opinion this shows a lack of understanding for client needs and how to leverage technology properly to operate their business.

Sam, 

I am not an expert in this area but I have experience with a lot of renovations and permits.  I ask this question all the time, "what happens if they want you to permit work for something done before you bought a property."  The answer has always been, I have not heard of that happening.  (This is from years of asking the question from general contractors, real estate agents, and others in the business).  Since it seems you are getting hit with something that almost never happens, if I were you, I would reach out to a real estate attorney.  The city may be more willing to work with you and negotiate if you have an attorney make a call for you to discuss the situation.  (It's annoying but often times attorneys get further than you or I can just because of their title).  If the attorney only has to do a small amount of work like make a phone call it will be inexpensive, especially compared to what the cost will be to resolve the prior work.

I would also go after the contractor that failed you (for the part they were responsible for).  Hit them where it hurts online/social media, facebook, google, better business bureau, yelp, anywhere and everywhere you can find to hit them.  I have found I get a response from contractors/vendors if I agree to take down negative reviews if they resolve the problem.  I would also file a claim in small claims court against the general contractor that failed to do their role properly (provided the cost of all this for you is under the limit allowed in small claims).

Hopefully someone with more experience will also comment specifically on how to help resolve the permit issue.

Good Luck