OMG!!! I can totally relate! Alignment of incentives is definitely a big one! The worst management company I worked with charged 10% on top of a vendor’s cost that they called « coordination fee »! I only found out after I noticed a bill that didn’t match what the vendor charged. So if they paid the gardener who charges $180, they would charge the landlord $198. They pocketed the difference. Unbelievable. That’s on top of the 7% monthly management fees of rental income they charge the landlord. What was the point of paying them a monthly fee for?! If they did a periodic inspection, they charged another $150. I can keep going. I definitely learned that the property management company you hire can make or break your investment.
Such a great watch! The section about the importance of incentive alignment between investors and property managers really got me thinking. For fellow multifamily investors, our channel is packed with invaluable insights and strategies.
AT 15:55 THE STRESS OF LEVERAGE !!!! LOL !!!! This is why I love Dave Ramseys 100% debt free real estate ways. I am far more less stressed now that I paid off every house we have. When your 100% debt free you really dont even need any reserves. The reserves flow in every Month like monstrous massive gargantuous cashflow when your 100% debt free !!!!
If you’re a landlord looking to evaluate potential management companies, I recommend first getting an understanding of the type of training and education that the large national management companies provide to their employees. The reason being is that, once you know and understand these things, you’ll be better equipped to interview potential management companies to determine if they “pass the test”. Believe me, there are alot of small management companies out there that come across as “professional” and “knowledgeable “… However, I see and hear these companies doing and saying things (mainly in their ads) that we, at the large companies are taught to never do-- or, for that matter, they don’t do things that we are always taught to DO. That said, My background is a little bit different from most of the landlord advice channels out there. Unlike most of them, who are primarily other small landlords themselves, I come from decades of Working at the large, national and statewide Property Management organizations, where I’ve manage the large apartment communities (300/500 unit communities) . To better explain this…I use the analogy of the car sales industry. If we were to equate our business to the automobile sales industry-think of it like this…. When purchasing a car, there are THREE primary ways to do so. There’s the guy that put his car in the driveway and puts the “for sale “ sign on it, places the Craigslist ad and puts the ad in the newspaper. Then there’s the “Bob’s Auto Sales” -the small local dealership… That said, most TH-cam content creators are a landlord that would be equivalent to one of these levels. Now, to keep with this analogy, I’ve never put my car in the driveway to sell it , nor have I ever owned my own private small dealership. Instead, I come from decades of working at the “Toyota or Chrysler” dealerships (as an analogy-not literally) . My courses teach the “Bobs Auto Sales” (small property management company) and the guy who puts his car in the driveway to sell it(the small 8 unit apartment owner) all the business practices that we teach our staff at Toyota and Chrysler (the large National Property Management firms). I hope that analogy makes sense. These companies are deep into training their leasing staff. I take all that training and education that we give our associates at the big national companies, and bring it to the small landlord/small property management outfit. I offer courses on Fair Housing, Marketing and Leasing tactics, Proper Application Processing Procedures, and General Property operations. Each of my classes come with a downloadable PDF textbook and Forms/Templates that pertain to each class. For example, the General Property Operations class (titled “Move In Day and Beyond) comes with editable forms for “Preventative Maintenance Checklists” for winter, spring, summer and fall. The class “Mastering the Art of Apartment Marketing” comes with a ‘Competitive Market Study’ template that you can use to compare your property to your competitors and thus set your rental rates more accurately. The “Rental Application Process Procedures” class comes with an “Income Verification form” and a “Landlord Verification Form” as well - just to name a few. I began my landlord training business after realizing that there is such a huge gap between the training and education that we have over at the large companies (such as Lincoln Property Co., AMLI Residential, Fogelman Properties, etc.) and that of most small landlords. www.Jppropertyconsulting.com
Great presentation! My only question is where to find such a great PMC in US when 99.9% of services we get now, regardless what field, are in line of Banana republic services?? Regardless what and where services we receive now SUCK!
Great episode, Coach! We're in the process of starting to rent a SFH in Greenville SC. Do you know of an honest property manager in the area that's worth of recommendation? We had a bad experience with one PM in the past (in another state) and pretty much ruined PM reputation for us, but maybe there's one out there, just a needle in the haystack??
My PMs take the late fee and keep it for themselves. To be honest I was flabbergasted. This is what the contract says: "Any rent payment that is not received by Owner by 11:59 p.m. on the 4th day of the month it is due will be assessed a late fee of XX. The parties agree that this late fee shall serve as liquidated damages, and not penalty for the late payment. The parties also agree that this amount is a reasonable sum to serve as the liquidated damages, and further agree that the actual damages suffered by Owner because of the late payment would be difficult, if not impossible, to ascertain. Total amount of late rent and late fee is payable by money order, cashier’s check, or other certified funds. Deductions made from rent without written permission from Owner are considered as unpaid rent and will be subject to a late fee." Please let me know your thoughts on this, thanks.
That language doesn't say who gets the late fee which makes it sound like the owner should get it. My contract with my property manager makes it clear that the property manager takes the late fee.
So tenant pays late and “potentially”causes your mortgage payment to be late. Lender charges owner a late fee for late mortgage but property manager keeps all of the tenants’ late fee(s)??! Lol!
Managing is the easy part for me. So far I've had a hard time finding a good/reasonable handyman.
yeah - that can be a tough one for sure.
OMG!!! I can totally relate! Alignment of incentives is definitely a big one! The worst management company I worked with charged 10% on top of a vendor’s cost that they called « coordination fee »! I only found out after I noticed a bill that didn’t match what the vendor charged. So if they paid the gardener who charges $180, they would charge the landlord $198. They pocketed the difference. Unbelievable. That’s on top of the 7% monthly management fees of rental income they charge the landlord. What was the point of paying them a monthly fee for?! If they did a periodic inspection, they charged another $150. I can keep going. I definitely learned that the property management company you hire can make or break your investment.
Such a great watch! The section about the importance of incentive alignment between investors and property managers really got me thinking. For fellow multifamily investors, our channel is packed with invaluable insights and strategies.
AT 15:55 THE STRESS OF LEVERAGE !!!! LOL !!!! This is why I love Dave Ramseys 100% debt free real estate ways. I am far more less stressed now that I paid off every house we have. When your 100% debt free you really dont even need any reserves. The reserves flow in every Month like monstrous massive gargantuous cashflow when your 100% debt free !!!!
Wow this was fantastic advice thank you very much!
Glad it was helpful! Thanks for watching.
Chad thanks for this great session. Much needed for us newbies.
happy it was helpful! thanks for watching!
Great info. I’m at the point of my career where I’m ready to hear this
If you’re a landlord looking to evaluate potential management companies, I recommend first getting an understanding of the type of training and education that the large national management companies provide to their employees. The reason being is that, once you know and understand these things, you’ll be better equipped to interview potential management companies to determine if they “pass the test”. Believe me, there are alot of small management companies out there that come across as “professional” and “knowledgeable “… However, I see and hear these companies doing and saying things (mainly in their ads) that we, at the large companies are taught to never do-- or, for that matter, they don’t do things that we are always taught to DO. That said, My background is a little bit different from most of the landlord advice channels out there. Unlike most of them, who are primarily other small landlords themselves, I come from decades of Working at the large, national and statewide Property Management organizations, where I’ve manage the large apartment communities (300/500 unit communities) .
To better explain this…I use the analogy of the car sales industry. If we were to equate our business to the automobile sales industry-think of it like this…. When purchasing a car, there are THREE primary ways to do so. There’s the guy that put his car in the driveway and puts the “for sale “ sign on it, places the Craigslist ad and puts the ad in the newspaper. Then there’s the “Bob’s Auto Sales” -the small local dealership… That said, most TH-cam content creators are a landlord that would be equivalent to one of these levels. Now, to keep with this analogy, I’ve never put my car in the driveway to sell it , nor have I ever owned my own private small dealership. Instead, I come from decades of working at the “Toyota or Chrysler” dealerships (as an analogy-not literally) . My courses teach the “Bobs Auto Sales” (small property management company) and the guy who puts his car in the driveway to sell it(the small 8 unit apartment owner) all the business practices that we teach our staff at Toyota and Chrysler (the large National Property Management firms). I hope that analogy makes sense.
These companies are deep into training their leasing staff. I take all that training and education that we give our associates at the big national companies, and bring it to the small landlord/small property management outfit. I offer courses on Fair Housing, Marketing and Leasing tactics, Proper Application Processing Procedures, and General Property operations. Each of my classes come with a downloadable PDF textbook and Forms/Templates that pertain to each class. For example, the General Property Operations class (titled “Move In Day and Beyond) comes with editable forms for “Preventative Maintenance Checklists” for winter, spring, summer and fall. The class “Mastering the Art of Apartment Marketing” comes with a ‘Competitive Market Study’ template that you can use to compare your property to your competitors and thus set your rental rates more accurately. The “Rental Application Process Procedures” class comes with an “Income Verification form” and a “Landlord Verification Form” as well - just to name a few. I began my landlord training business after realizing that there is such a huge gap between the training and education that we have over at the large companies (such as Lincoln Property Co., AMLI Residential, Fogelman Properties, etc.) and that of most small landlords. www.Jppropertyconsulting.com
Great topic! Love the information on how to select a PM.
Thanks both for sharing your knowledge.
Happy to share! Glad it was helpful.
This information is so valuable that I revisited . Thank you so much Couch Carson and Erion Shehaj, for sharing your knowledge.
Thanks for watching!
Great presentation! My only question is where to find such a great PMC in US when 99.9% of services we get now, regardless what field, are in line of Banana republic services?? Regardless what and where services we receive now SUCK!
Great episode, Coach! We're in the process of starting to rent a SFH in Greenville SC. Do you know of an honest property manager in the area that's worth of recommendation? We had a bad experience with one PM in the past (in another state) and pretty much ruined PM reputation for us, but maybe there's one out there, just a needle in the haystack??
My PMs take the late fee and keep it for themselves. To be honest I was flabbergasted. This is what the contract says:
"Any rent payment that is not received by Owner by 11:59 p.m. on the 4th day of the month it is due will be assessed a late fee of XX. The parties agree that this late fee shall serve as liquidated damages, and not penalty for the late payment. The parties also agree that this amount is a reasonable sum to serve as the liquidated damages, and further agree that the actual damages suffered by Owner because of the late payment would be difficult, if not impossible, to ascertain. Total amount of late rent and late fee is payable by money order, cashier’s check, or other certified funds. Deductions made from rent without written permission from Owner are considered as unpaid rent and will be subject to a late fee."
Please let me know your thoughts on this, thanks.
That language doesn't say who gets the late fee which makes it sound like the owner should get it. My contract with my property manager makes it clear that the property manager takes the late fee.
So tenant pays late and “potentially”causes your mortgage payment to be late. Lender charges owner a late fee for late mortgage but property manager keeps all of the tenants’ late fee(s)??! Lol!
Mine takes half 😏
I guess we need to change the contract
I’ve yet to find any property managers worth their salt
You don't... because they don't exist
There have to be some, right?😄
@@CoachChadCarsonthey just have to be good not great or competent