All Forum Posts by: Kenny Dahill

Preach @John Underwood!

Isn't this one of the supposed values of hiring a PM?  They have a network of vendors, know the latest laws, and should know how to proactively get DCA for all their tenants who need it.

Regardless of the tenant's financial issue, the PM has let them fall over a month behind on rent.  Absurd.  I'd review the Management Agreement and make sure they're meeting all of their responsibilities that you're paying them for.  And if they're in breach of any clause, immediately provide the proper notice.

You must honor the lease agreements, no way out of them.  But you can definitely terminate the PM agreement.  You'll probably pay a penalty fee, typically 100% of the remaining fees they would've earned.  I know, real fair!

Ultimately, they're an agent working for you.  I'm sure PM's will correct me but agency typically requires them to do as you request.  If you want to start the eviction process, and legally can, then provide the proper written request for your PM to start.

@Gisell Garcia@Miguel Angel, anyways I've built our own rent collection software, I'm still realistic and understand why landlords choose Venmo/Zelle.  Let's break this down, shall we?

Peer-to-Peer:  Popular apps that allow anybody to pay each other.  i.e. Zelle and Venmo

-  Pro's:  Super simple.  They have literally millions of users and transactions to perfect their processes and features.  And it's convenient for life if you use your personal bank account, you can still have one app for rentals and paying friends.

-  Con's:  Nothing about the software per say, but about the landlord experience.  These apps don't know what type of payment is being sent, when rent was actually due, etc.  Therefore, it can't add automatic late fees, send email reminders or track per property.  If you're okay with not having any of those, then hey, they're an amazing free option that your tenants will like.

Landlord Software:  Software and platforms designed specifically for landlords and typically have more than just rent collection.

-  Pro's:  Additional functionalities, such as tracking maintenance, automated bookkeeping, screening reports, etc.  They provide essentially all the tools under one roof for you.  As well, these platforms are designed to acknowledge the different payment types and dates.  Thus allowing you to set automatic late fees in case the tenants doesn't pay before the end of grace period.  Note, there's typically email reminders sent to the tenants as well.

-  Con's:  Fees.  Yes, these platforms need revenue to survive and typically the easiest way is charging a monthly membership or per transaction fee.  User Experience not nearly as easy.  Again, I'm realistic and while I love our platform and our competitors, nobody comes close to the level of simplicity that Zelle or Venmo has.  Usually landlords don't care but some tenants prefer a basic app like Zelle/Venmo.

Full transparency: I've used Venmo and Zelle in the past to collect rents.  They worked great.  For 1-2 units, they suffice.  For me, I wanted to portray my real estate investments as more professional and that was the main reason I switched to using landlord software for rent collections.  The larger your portfolio grows, the better systems are.  You can definitely integrate Zelle/Venmo into your systems but there's easier ways.

@Jay Y., definitely not the norm and I hope it doesn't become that!

Are lease renewal fees common?  Yes.  However, usually it's paid by one side and not both.

Essentially this is the PM adding $15-20 of rent but paid upfront and without you benefitting from it.  Actually, it's the opposite of benefitting since you too had to pay!  I'd have a strong issue with that, especially if it wasn't disclosed in their management agreement.

That $200 puts you at risk.  What if the tenants want to stay but not pay the $200?  They move out, you lose rent during vacancy and probably pay $1000 or full-month rent for the next tenant placement.  Sheesh.  A lot of risk for their 1hr of work...

 Management fees haven't increased in 25 years?  It's a variable rate, therefore as rents have gone up so has their fees collected. While true that it's been 8-10% for a long time, that's not an accurate depiction of their fees not going up.  Unless they're a flat fee structure and have been for 25 years.

And since rent has inflated more than income since 2000, that benefits the property management business.  Granted, since the pandemic we've seen wages have a higher inflation than rent.  But that's 2 of the last 22 years.

@Carlos Florez, largely depends on your portfolio and desires.  A few comments:

Professional Grade:  These platforms are geared down property management teams, or landlords with larger portfolios and a team to help.  They have stronger accounting features and more team functions.  But, you'll generally pay a higher monthly fee to use.  Such as Buildium, Appfolio.

Landlord Software:  If you self-manage, you don't need as much accounting functionality because most landlords a) send to their CPA and b) don't need 'investor reports' since it's themselves.  These are typically transactional base (i.e. per unit) or a smaller than Professional Grade monthly membership ($20-25).

Landlord+Team:  Newer trend of landlord software that has similar functionality but the ability to add a team member/partner if you need.  Such as, local real estate agent for leasing, assistant, etc.

I love talking about these software options so feel free to reach out with any questions!

@Kunal Lakhwani, have you thought about a co-management relationship with a local real estate agent to handle the tenant placement?  You can still self-manage from distance and utilize help when needed for the local tasks.

@Lanisha Townsend, consider reading up on the PM interview process before you call them.  There's plenty of blogs with the typical 15-20 questions to ask a PM.

If they can't clearly indicate in their Management Agreement when/where/why they earn a fee, and how much, I'd run.

Also, track what date/time you called them and see how long it takes for them to call you back.  Even if that means calling afterhours.  This is one of my favorite tests because responsiveness is a common frustration for landlords.

@Troy Williams, sounds like you’re looking for co-management style of property management.    You need help but want to remain in control.

Are all the units in the same market or are you needing help in multiple markets?

Reach out to an insurance who specializes in the asset class you’re looking for. There’s a lot of different scenarios but I’m sure they can provide you a ballpark figure.

@Account Closed, are you looking to completely outsource or wanting to be involved at some level (i.e. screening tenants).