While hiring a property manager can make your life easier, there can also be a few challenges. As talked about in this video, Chris Lee and Eli Secor discuss Eli’s experience with a property manager.
Eli manages a few rentals, one of which is a three-hour drive from where he resides.
“I got to the spot where I was busy with my family and felt like I didn’t have the time, but more so, I wanted to be really careful that I was following the local rules, which are hard to keep up with, and also keeping up with the rents,” Eli said.
This ultimately led to his decision of hiring a property manager.
Are they filling vacancies with good tenants quickly? Are they managing maintenance and upkeep matters to the satisfaction of the tenants? Both of those things went downhill after that initial year and a half.
Eli Secor
Costs
Eli is paying a monthly management fee, which was 8% of the gross rent. He also has a 50% rent-up fee, meaning that if rent was $1,500, it would cost him $750 to fill the unit. On top of that, he has a renewal fee of about $200, small admin fees, markup fees on top of the expenses that were needed for maintenance, and management fees.
His experience was positive for about a year and a half, as the property manager was able to improve gross rents and find tenants. Therefore, the fees were paying for themselves. However, as time went on, issues began to arise.
Also Read: The Costs of Hiring a Property Manager – Video Extra
Eli’s Experience With a Property Manager
“The factors that changed are the variables that I think are the biggest issues when you’re looking at hiring a property manager. Are they filling vacancies with good tenants quickly? Are they managing maintenance and upkeep matters to the satisfaction of the tenants? And also in a reasonable way in terms of how much it costs, making good decisions. Both of those things went downhill after that initial year and a half,” Eli said.
Maintenance Request Management
One of the unforeseen challenges was that the property manager’s response to and handling of maintenance requests fell short of expectations. There were multiple times when Eli wanted a project done, but the estimates given to him were overpriced, leading to him managing the project anyway.
He provided the example of his garage roof repairs, where upon receiving the estimate from the property manager, he decided that it was overpriced. He hired his own contractor who gave him an estimate that was around a third of the initial cost.
Another example was when he needed to redo the flooring in one of his units. After determining a reasonable vendor and setting a time for the contractor to get an estimate, the contractor was unable to enter the unit due to issues on the property manager’s side.
Finally, after speaking with the general manager, they sent an in-house maintenance person and gave Eli an estimate of $1,200. A month later, however, he found out that it was actually costing him $2,800. And in addition to the extra project costs, he lost around three to four months of rent.
“I think it’s a tricky thing, to have kind of the embedded interest that you have as, an owner. A property manager will try to do that, but it’s a different thing,” Eli said. “Also, you do need somebody involved who knows enough about maintenance that they can triage a bit upfront, even just by phone or photos. So that they send the most effective vendor first. You can either know that like I do or have good resources, in terms of a trusted handy person. That’s kind of the best of both worlds, somebody you can call on.”
Application Process
After finally completing the flooring project, the unit was ready to be leased. The unit was ready to be leased after finally completing the flooring project. However, after not being able to find a tenant for weeks, Eli went down to take a look at things. He found that the outdoor stairs had cobwebs, leaves, and dirt on them, leading to people tracking that stuff into the house.
Eli also re-implemented a pet policy, which was in place for the other units, but not the one that was being listed.
A week after getting things in order, an applicant was accepted. An applicant was accepted a week after things were in order.
Also Read: Rental Turnover, Preparation, and Upkeep: Video Extra
Eli’s Next Steps
Currently, Eli still has that property under the management of a property manager, although he is considering taking it back. With this move, he knows that he’ll have to familiarize himself with the market and regulations in the area.
Working With a Property Manager: Landlord Gurus Takeaway
Hiring a property manager can remove stress from duties such as keeping up with the market, regulations, and tenant needs. While it can have many benefits, it’s important to consider the cons too, such as the ones Eli mentioned.
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