Real Estate Investing: hiccups and the routine things
October 17, 2016
Has it really been so long since my last update? Whoops.
Things have mostly been going well, but I’m definitely seeing the downside of hired property management. Not that I have a choice, the property is an unrealistic distance from us so I can’t drive over there and manage it myself. But when your property manager’s responsiveness goes down by 55% despite your specifically calling them out for it, then it’s time for a change.
I’m also in the market for a new home warranty company, and a new loan! If possible, I’m looking to refinance since my original interest rate was not favorable at all and I need to bring our monthly costs down.
But let’s start with one thing at a time since I get that “mountain sitting on my chest” feeling from all the things that feel like they must be done NOW.
- I contacted my broker, and investing friend, to get recommendations for a new property manager. (Turns out that same friend is also considering a change because we use the same person and it’s not just me, the service has been much less attentive than it should be.)
- The broker gave us a recommendation for a boutique property manager. The fees are pretty high, in addition to the monthly 10% off the top, so I’m thinking about what it is I want and how much I’m willing to pay. I want the kind of hands-on detailed service this manager provides but I have to consider whether my income will bear it. My monthly profit margins still aren’t high enough to cover more than a little over our expenses by the end of the year.
- I read through some Yelp reviews and sites, and sent an email asking about services and fees, to the one that seemed to be a possibly good fit.
- They replied the next morning saying politely they were not taking new clients because they have a full docket. That’s actually a good sign, I think, when a company knows how much they can handle well and sticks to it. Not great for me personally but good to know they’re not the sort to just take in as much business as they can get and damn the consequences.
- My friend is inquiring after a larger company. He and I both came up with their name independently, I’m guessing because it was because they advertise.
- My preliminary research turned up mixed results. They have all their information up front, which is great, and they state pretty baldly that if you’re asking about the kinds of restrictions you want to put on who gets to rent from you, you’re very likely trying to screen out people based on discriminatory reasons. This isn’t the first time I’ve been told that screening renters based on certain characteristics is really a racially motivated screener, I’m glad to see this company is speaking plainly about what that’s code for. I like that because of their size, they have easy ways for the renters to pay electronically. But I’m not sure that I want to work with a huge company that only gives you a price break after you own 40 units. For one thing, that’s a hell of a lot more than I intend to take on, so I wouldn’t benefit from adding one or three more properties with them the way I would with the boutique manager. For another, while they have the infrastructure to be more technologically up to date, that also means they may not be motivated or willing to consider updating where they’re lacking.
:: If you were renting, would you prefer to deal with a large somewhat faceless company, or a boutique property manager? If you were hiring a manager, which would appeal to you more?
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