All Forum Posts by: Samuel Eddinger

@Max T.

I like this modification.  It is an interesting concept and I'm going to think more about it. Anytime we can reward a property manager when an owner wins (lower vacancy), I think you can set up win-win situations.

@Max T.

I think that is an interesting idea but has some flaws.  Based on fair housing laws you cannot discriminate.  However from our experience, roommate tenants (for example four friends) turn over more than families with young children.  For the same quality of property management, some tenants will turn over more.  

If you promoted that in lieu of leasing, it is possible that a property manager may screen less well if the tenant profile is more conducive to a long term tenant (aka, I'll sign a three year lease, etc).

Thanks for the information  @Chris T..

Anyone else have any opinions on this topic, or should we just minimize cost everywhere and expect higher rates of returns?

@Ryan Deasy - sounds good.  I wish you luck as you continue investing.  Just remember when your properties are running smooth, no one needs a property manager.

I have a property management company which I am trying to grow. I started out 6 years ago as a real estate investor so I understand the philosophy of minimizing all costs to maximize your ROI. The question though is whether or not having the right property management company can actually increase your ROI (even after deducting their fees)? I believe it can.

Since we started as real estate investors, our companies focus on all the areas that rob ROI (mostly bad debt, vacancy periods, maintenance costs and monthly rents).

We lease prior to a tenant leaving to minimize vacancy periods (currently we close more than 2 weeks faster than average property management companies and that doesn't compare to investors who self manage).  

Since we already own a lot of properties, we work to partner with cheap and skilled tradespeople saving maintenance costs.

We are proactive in our maintenance so our tenants are happier and they stay on average longer than most tenant occupancy periods (which saves the owner on future leasing).

We set up leases to end during summer months where we have the most tenants looking for new houses to rent so we can maximize rental rates.

Even though we rent fast, we prioritize make ready repairs so that we can continually keep the property up to maximize rental potential and identify and get great tenants.

We are proactive in our collection of rent so we evict faster than self managing investors.

We perform inspections to identify how tenants are keeping the property to not renew leases to hoarders and people who break lease terms.

We perform move in and move out inspections by video to document condition to charge back tenants on security deposits.

For some investors, they are not as on top of all aspects of property management and they should get help (to improve ROI). There are some property management companies who are not proactive like us and they do not really add value.

What do you think, can partnering with a holistic property management company actually increase ROI (even after deducting fees)? If you knew you had a holistic property management company, would you consider buying more?

@Ralph Miller

I started an investor focused property management company. I believe if you run the property management correctly, you can get all management fees paid for in the differences in lost productivity when you self manage.

If you are only leasing, a real estate firm has less interest in marketing your property early (while the tenants still occupy the property) and tightly screening an applicant.  A property management company is aligned with you because like you they do not want to deal with the day to day headaches of the tenant.  By leasing a property while it is still occupied, we average over 2 weeks less vacancy period (and frequently do 0 day turns).

Since we own a lot of the units we manage, we also are aligned with you in vendor costs and quality. 

Since we are proactive in our response to tenants (24/7 response), quick maintenance, etc, our tenants are happier and stay longer (you pay less leasing).

We also set up our leases to be in the best months where tenants are renting (May through August in our market because of schools and weather).  This allows us to get top dollar (it also makes our job that much harder since our leases are stacked).

I haven't even included the piece of mind you get and everything else. Partnering with the right company is like buying a REIT but also getting the price appreciation after.

@Ryan Deasy. I own a rental property company which actually services the New Britain area. We pride ourselves in actually making a higher ROI for you after paying our fees by the following:

Leasing while the property is occupied reduces our vacancy period by at least two weeks (we actually do 0 day turns).  This covers the leasing fee (or probably a full year of management) right off the bat.  

We partner with quality and cost effective vendors (saving you time to call and try to negotiate lower rates from afar).  

Because we are proactive with our maintenance and repairs, our tenants stay longer (saving you further leasing fees).  Also because we represent you, we only put in tenants that meet your criteria (which is hard if you are only giving an agent leasing because they only want to get it done quickly).

We also do other value add things like providing you yearly summary statements, leasing only in the summer months to maximize rent (do you really want to trust a tenant that needs to move on January 1st?), working with attorney's that specialize in evictions to minimize vacancy periods and the list goes on.

We do make ready repairs on a moments notice so that we can maximize your rental on each turn.

A good property manager should take away the headaches and pay for themselves in different ways that are impossible to evaluate in these spreadsheets (I should know since I own 16 rental properties).

Hi @Mark DiGioia, I sent you a PM.