All Forum Posts by: Daria B.

@Brandon Shepherd

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

@Daria B. I must've missed your response. I didn't know about this and didn't know that I had to for Gainesville. As I mentioned, the local PM was surprised as well and said they were flooded with the same inquiries I had. 

@Linda Weygant @Daria B.

I'd like to check in a few years later with you both to see how the reglazing has held up. Are you still happy with it?

This is a 2 minute fix for your cpa and something you’re tracking anyway to make sure you get reimbursed. It’s probably their software as my PM includes every dollar they pay me on the1099. I use quicken to track rental income and expenses anyway so I know how each property is performing and if they have paid back utilities I bill them. It’s been a non-issue for my CPA as I simply report my actual rental income per property and he adjusts the numbers. 

And if the PM has been charging fees against the utilities, without fully disclosing that, I would demand reimbursement for those fees.

That's exactly what I was thinking. PM must be getting paid as percentage of Rental Income and their goal is to increase as much as they can. Even though it might be small as an individual, for PM, if you add 100 properties it could be significant. Act now, have them corrected or else FIRE

Question: is the Property Manager charging you a management fee based on a percentage of rent income collected? If so, classifying the utility income as rent income would actually increase the manager's fee. If the Tenant pays $150 a month for utility but it's classfied as rent income, a 10% management fee would cost you $15 per month.

Whether it's costing you or not, it's important for proper accounting. I would demand they fix it immediately or consider firing them.

@Daria B.  I wouldn't fix it if the tenant is generally not good and not paying which it sounds like is the situation. To avoid concerns about diminishment of services for the rent there are two decent solutions.  I would favor going to a habitat and getting a second hand countertop microwave for 20$.  Your other option is to credit them (they aren't paying anyway) for some loss of use of the premises. I don't think you could be faulted for a countertop microwave, it is what they need functionally and it is a no pressure solution for you. The lease is what it is now.  Not every built in microwave replacement installation is simple.