OT: FIRING Property Management Companies

[paramount]

I am very close to firing my property management company; it will cost me 3 months of management fees, but I think it will be well worth the cost.

Oh sure, it all started out fine…they were very nice, responsive – even had a marketing analysis presentation.

So I hired them…and soon thereafter it all started going down hill.

I signed the management agreement on August 5th; but it was almost November before anyone moved in.

During the advertising/vacancy period, they never once said let’s adjust pricing, or any suggestions for that matter – at the end of September I had finally told them get the house occupied or I’ll just drop the price and rent it myself.

I should have fired them at that time. Albeit they had a few tricks up their sleeves (like we have someone very interested, bla bla).

I also noticed they had a lot of employee turnover – that was a bad sign as well.

Fast forward to present time: They do not answer their phone, they do not return phone calls (at all); on rare occasions they will reply to email (and that will take weeks and multiple emails just to get an irrelevant response).

This is what I’ve learned about Property Management Companies (not a complete list):

1. NEVER hire a property management company without solid independent references. Sometimes this can be hard to figure out, but do your homework. Look for internet reviews for further clues.

2. Never hire a large property management company – to much overhead.

3. Be weary of any property management company that has in-house maintenance.

4. Don’t automatically go for the cheapest company. By this I’m referring primarily to monthly management fees. But there are other fees to consider such as lease fees, but overall the fees should be structured to motivate the property management company while still being reasonable.

5. The manager should be a licensed realtor IMO.

6. Try to check on other properties they rent. If they look like dumps that might be a sign the property is not being cared for.

[Diego Mamani]

[quote=paramount]During the advertising/vacancy period, they never once said let’s adjust pricing, or any suggestions for that matter[/quote]

I think it’s up to the owner (landlord) to set the price/rent. Can’t fault the PM company for a poor pricing decision, unless they offered to set a price as part of their services. But even in that case, if the owner doesn’t know what the market rates are, he shouldn’t be in this business.

[paramount]

[quote=Diego Mamani][quote=paramount]During the advertising/vacancy period, they never once said let’s adjust pricing, or any suggestions for that matter[/quote]

I think it’s up to the owner (landlord) to set the price/rent. Can’t fault the PM company for a poor pricing decision, unless they offered to set a price as part of their services. But even in that case, if the owner doesn’t know what the market rates are, he shouldn’t be in this business.[/quote]

If you read my statement, I didn’t ask the PM to set a price, but it is part of their job to advise me – and they did provide initial analysis.

But markets change, and a good PM company will advise you accordingly.

[EconProf]

You’ve posted a lot of good advice, that apparently you learned the hard way.
I’d question your advice against using a management company that has its own in-house maintenance, however. So many repairs are minor and can be handled by a good fix-it guy, that it may (stress on MAY) be cheaper than calling in a contractor/repair company every time.
Also, as to pricing of the rental, I believe in setting a realistic price based on comps that YOU do, perhaps with their help, and then going ahead with a full force advertising blitz. Craigslist is especially useful, if you use strategic pictures, carefully chosen bullet points to describe it, etc. Then rerun the ad every few days since many craigslist users look only at the last few days’ entries.
Then, if it doesn’t rent in a really short time period, and you or your company has had inquiries and lookers, then your price is simply too high.
The market is trying to tell you something. Listen to the market and adjust quickly. Too high a rent and a long vacancy period are a common mistake, and more costly to you in the long run.

[EconProf]

One last item: Why do you have to pay them 3 month fees to fire them?
It appears they may have breached the contract by not performing. Reread the contract and see if you have an out by virtue of non-compliance on their part.

[paramount]

[quote=EconProf]One last item: Why do you have to pay them 3 month fees to fire them?
It appears they may have breached the contract by not performing. Reread the contract and see if you have an out by virtue of non-compliance on their part.[/quote]

About 3 hours ago I received an email from the company that has assumed operations of my original PM company.

I knew something didn’t seem right….

[paramount]

Anyone else had a similar situation: The property management company managing your property is either sold or folds.

A new company comes in and says: your contract has been assigned to our new company….

I don’t see how there’s is any legal basis for the previous company to reassign our contract.

As far as I’m concerned, the contract is now void and someone owes me some money, namely the deposit money.

The reason I was trying to contact them is because they withheld money from my monthly deposit for no valid reason, in addition the deposit was late.

I’m not sure what to do…

[Diego Mamani]

Paramount, it’s SOP that a new company would take over the old company’s clients. You should visit them in person and tell them that you wish them well but that you’ve decided to self-manage for time being. If they owe you money, try to get it back. Maybe you can work out a deal with the new management? Who knows, after meeting the new people in person you may decide to give them a chance to earn your business.

If you don’t want to work with them, and they don’t want to refund your money, you could still go to small claims court.

[temeculaguy]

paramount, not sure who you used and this isn’t neccesarily an endorsement but I have relatives who have been very happy with this local company and have used them for years.

http://www.sdlrealestate.com/?IDXSESS=b4oala4lscf6722ukt3pvcsg43

However I’ve read bad reviews on yelp, and i remember reading bad reviews on yelp when my relative was contemplating using them (most of the complaints back then were tennants mad because after a few years of paying rent on time they were thrown out quickly for not paying, as if they felt their history gave them the right to not pay). But I just read a bad one from an owner who is planning on selling and not getting the service they want because they aren;t using them as the listing agency (you can’t make everyone happy). My folks just switched from doing it themselves to a management company and they are completely happy, but they were too nice IMO and let everything slide forever, including rent (they didn’t use the company I linked because their rentals are out of town and low end, that comapny doesn’t seem to handle those less desirable towns). They still love their management comapany. I agree, a licensed realtor is better, everyone I know that uses a management co uses a realtor/management co. Hopefully you find a better one, but I wouldn’t forfeit any $, just switch when you can.

[disimilar1]

I have a similar issue with a RE Agent who leased a property for me long ago and had it in the contract they were entitled to renewal commissions.
The agency was sold but the agent claimed the contract was assigned over to him. He did cough up an assignment letter after much pulling of teeth. (signed by his friend, the broker who had owned the co that was sold).
Is something like this valid?

[poorgradstudent]

Speaking from my own experience as a renter, property management companies don’t do anyone any big favors. The companies are out to make money for themselves, which is understandable, but I witnessed first hand how willing our manager was to short change actually maintaining the property in a proper way in order to maximize short-term profit. Specifically, the plumbing; it was an old property with the sort of issues you’d expect, but the property manager always chose the cheapest, quickest “fix” rather than investing any money in upgrading or improving the property.

I’m sure there are good property management companies out there, but my overall impression is they eat away at a property owner’s bottom line without providing that much benefit.

[Diego Mamani]

[quote=poorgradstudent]I witnessed first hand how willing our manager was to short change actually maintaining the property in a proper way in order to maximize short-term profit.[/quote]
I’d love to see an example of that

[quote=poorgradstudent]Specifically, the plumbing; it was an old property with the sort of issues you’d expect, but the property manager always chose the cheapest, quickest “fix” rather than investing any money in upgrading or improving the property.[/quote]
The “money” you are talking about belongs to the property owner, not manager. Not sure how the manager maximizes his own short-term profit by not spending the owner’s money. If anything, the manager would be better off if the proper repairs are carried out, that way the building lasts longer and he gets to keep his job longer.

Two explanations come to mind:
1. The property manager is just lazy or overextended, and what he does is not saving money, but saving his own time
2. More likely, the owner has made it clear to the manager that there’s no money for major repairs and that band aid solutions are good enough for now.

[Diego Mamani]

[quote=disimilar1]I have a similar issue with a RE Agent who leased a property for me long ago and had it in the contract they were entitled to renewal commissions.
The agency was sold but the agent claimed the contract was assigned over to him. He did cough up an assignment letter after much pulling of teeth. (signed by his friend, the broker who had owned the co that was sold).
Is something like this valid?[/quote]

Looks valid to me. Are you trying to get out of the contract? If you’re still not happy, you could contact the new owners and ask whether they feel at all bound by the old contract.

[Author]

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