Property Management – Recommendations

[MLG]

I’m hoping the Piggs can help me out.

It looks like my family and I will be moving to Texas in a few months. I still own a 1 Bed/1Bath condo in Mission Valley, that I am currently renting to a tenant. I bought it in 2004, I’m still very underwater, cannot sell it.

We currently have a fantastic tenant who is in the place on a month to month lease. If she gives notice after we move, I’ll want it rented out immediately.

Can any of you recommend a good property management company that could help manage the unit after we move? I’ve had horrible experiences with property management companies in SD in the past, hoping the Piggs might know something I don’t.

Thank a lot.

[paramount]

As many piggs have pointed out in previous posts, Property management companies can be more difficult to deal with than tenants.

Often times (IMO), property management companies are more interested in buying your house than renting it out on your behalf.

Remember, most PM companies are made up of realtors – need I say more?

If you know and trust someone like a friend who can rent it out for you consider going that route.

That’s what I did after firing the PM company I had been using. I paid this person $500 bucks, but you need to be crystal clear about the terms.

Also, the person I hired is a serial renter and was very familiar with the leasing process.

Much of the work can be done online.

[CA renter]

Agree with what paramount said.

Also, since you have a good tenant, you might want to ask him/her if they have any friends or family members who might want to rent it after they move out. Keep the rent low, and rent to top-notch, long-term tenants.

Good luck!

[EconProf]

Agree with the previous posters.
A PM company will charge you 8 – 10% of the monthly rents and may do very little to earn that. They have no incentive to minimize your expenses, and if repairs are needed simply place phone calls to their favorite contractors.
Better to keep rent low so you can be choosy about tenants and thereby minimize future problems. Pay a friend or relative here to take care of things, and be generous with their compensation arrangement, but do it on a piecemeal basis, not as a straight percentage of rent.

[(former)FormerSanDiegan]

I don’t really agree with the suggestions above, especially if you will be in another state.

I live about 130 miles from my rental property and I have used a property management company in San Diego since 2000. American Heritage properties
renthomes.com

The 10% fee for me well worth it.
Those you want to spend all the time and energy necessary to operate yourselves to save $100 a month or so, then you have more time and energy than me.

[spdrun]

It’s a farkin’ 1/1 condo. How much “management” is actually needed, other than finding tenants? As far as basic maintenance, either find a tenant who’s somewhat handy, or put a clause in the lease that all repairs < $300 are on the tenant. (i.e. the if-the-toilet-is-plugged-plunge-it-yourself rule). Added benefit is that a management company is required to withhold an excessive amount of taxes in CA, whereas a tenant could just mail checks directly to you out of state. (And yes, you're still expected to pay taxes, but better to PAY than give the pigs in Suckremental a free loan for 12 months.)

[SK in CV]

[quote=spdrun]It’s a farkin’ 1/1 condo. How much “management” is actually needed, other than finding tenants? As far as basic maintenance, either find a tenant who’s somewhat handy, or put a clause in the lease that all repairs < $300 are on the tenant. (i.e. the if-the-toilet-is-plugged-plunge-it-yourself rule). Added benefit is that a management company is required to withhold an excessive amount of taxes in CA, whereas a tenant could just mail checks directly to you out of state. (And yes, you're still expected to pay taxes, but better to PAY than give the pigs in Suckremental a free loan for 12 months.)[/quote] It's not a free loan for 12 months. And it is not excessive. If you object to paying CA income tax, don't buy in California. No withholding is required by property managers for Ca residents, only non-residents. And the withholding is based on the amount distributed to the property owner, not based on the gross rents collected. Waivers from the withholding requirement are easily obtained for non-resident owners who agree to pay CA tax.

[spdrun]

Since the seller is moving out of state, he’ll be a non-resident.

And correct me if I’m wrong, but the property manager’s distribution is the gross rent minus their fee. Owner still pays taxes, common charges, and mortgage directly, no? So the withholding would be closer to a percentage of the gross rent than that of the the net income. And unless an exception is granted, Jerry’s Pigs will owe the owner at year’s end, rather than vice-versa.

Personally, if either of my offers in CA go through, I have no intention of using a management crook.

[SK in CV]

[quote=spdrun]Since the seller is moving out of state, he’ll be a non-resident.

And correct me if I’m wrong, but the property manager’s distribution is the gross rent minus their fee. Owner still pays taxes, common charges, and mortgage directly, no? So the withholding would be closer to a percentage of the gross rent than that of the the net income. And unless an exception is granted, Jerry’s Pigs will owe the owner at year’s end, rather than vice-versa.

Personally, if either of my offers in CA go through, I have no intention of using a management crook.[/quote]

If you’re going to pay a management company, let them manage. Including paying the mortgage and property taxes, insurance and all other expenses. That’s what they’re getting paid for. Most people who use management companies for real estate do that. I never understood people who pay significant fees and then do the work themselves. They don’t get their money’s worth. Waivers from withholding are invariably granted except for failure to file CA returns when required.

[MLG]

Thank you all for the input!

I was not aware of the CA income tax for non-residents, something I will definitely research.

I’ve been renting it out for 3 years myself (no management company), and I agree, there is very little “management” involved. Approximately 3-4 times a year, there is a maintenance issue I need to take care of, but most months I do nothing except get the rent check in the mail.

The hardest part is finding a new tenant when one gives notice. That requires a lot of my time to drive down to Mission Valley to show the unit (usually several times before finding a tenant who is willing and able to rent).

I got some good advice from everyone, and think I can take it from here.

Thanks again.

[(former)FormerSanDiegan]

[quote=spdrun]It’s a farkin’ 1/1 condo. How much “management” is actually needed, other than finding tenants? As far as basic maintenance, either find a tenant who’s somewhat handy, or put a clause in the lease that all repairs < $300 are on the tenant. (i.e. the if-the-toilet-is-plugged-plunge-it-yourself rule). Added benefit is that a management company is required to withhold an excessive amount of taxes in CA, whereas a tenant could just mail checks directly to you out of state. (And yes, you're still expected to pay taxes, but better to PAY than give the pigs in Suckremental a free loan for 12 months.)[/quote] Sure it's only a condo... But how do you screen for a tenant that is handy when you live out of state ?

[recordsclerk]

If you make your tenant do all the work and pay for repairs, they won’t do the repairs. Never, ever put that in a lease. It’s always in your best interest to have tenants call immediately with problems. Little problems can be costly if ignored. It can lead to law suits when the place becomes inhabitable.

[CA renter]

[quote=recordsclerk]If you make your tenant do all the work and pay for repairs, they won’t do the repairs. Never, ever put that in a lease. It’s always in your best interest to have tenants call immediately with problems. Little problems can be costly if ignored. It can lead to law suits when the place becomes inhabitable.[/quote]

Could not agree more!

[(former)FormerSanDiegan]

Another reason to use a PM …

http://sdcia.websitetoolbox.com/post/Advice-on-bounced-check-from-the-tenant-at-lease-signing-6248831

[SD Realtor]

Seems that there was essentially no tenant screening done at all. No verification of the assets that the tenant had. No screening of the account statements. I am not saying a PM is or is not good to have, I believe that the use of a PM is dictated by each individual case including the experience of the landlord as well as the logistics of the property itself. However the person who posted on sdcia is more of a victim of his own inexperience then anything else. So yes he should have used a PM however he seems to have made little if any attempt at some rudimentary measures he could have easily done on his own to avoid the mess he is now in.

[Author]

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