The Least Expensive Property Management Contract Could End Up Costing You More

The Least Expensive Property Management Contract Could End Up Costing You MoreMany homeowners when looking for a property manager they must look at the contract. The property Management Agreement, has many details. It has a monthly percentage or a flat fee, as payment to the property manager. I want to share with you one property owner who had called me asking very few questions, other then the monthly percentage I change. She stated company A charged 4% monthly. In comparison I told her I charged 6% per month. While I was trying to explain what else you get with that 6%. She didn’t seem to hear me or ask any questions. When I again asked her if she had any questions, I received no answer. I tried to follow-up a couple of weeks later, I was told that company A, with the 4% rate, got the contract.

Not less then six months later, I heard from these homeowners, again. They were calling me back to see if I was interested in being their property manager? She started by saying how foolish she felt only looking at the 4%. They were so short sighted. That cheaper rate had many charges in the back end. It started right from the beginning with the weekly charges for advertising, the cost for every trip to show the property to potential clients. They took the first client that was interested, gave us no authority to accept or reject that client. I’m still not sure what their application process consisted of. They kept the security, cleaning also the dog deposit, she lamented. The first month the tenant was ten days late. They charged me for processing the 5 & 10 day notices, keeping all the late fees that accumulated. This was a pattern of late payment, processing fees, it seemed every month. Frustrated, I finally had to evict them, not the company. Again I paid. The tenant made so much damage to our beautiful home, we were sick. Those repair bills to get it back to a liveable condition, I will pay. I paid the $500 to get out of their contract. As she’s telling this to me, I asked her if she read company A’s contract. She admitted the only thing she focused in on was the 4% monthly. Now she has lost thousands of dollars, (even though some of this may be tax deductible),stating she is bitter.

I did take her as a client, only if she agreed that we would meet at the location to assess the damage. Also, that she will read every single line of the contract and ask questions. I personally think this is the hardest way to get a client. You are already starting in the negative, as far as trust.

As property managers we have to be better in advocating positive changes in our profession. Notify the legal authorities of illegal transactions, encouraging landlords to share with each other. There are good, some great professional property managers in their area. As a property owner you need to do your homework. If you decide to take shortcuts, it could end up costing you money, unnecessarily. We are a team.