Hiring a PMC? Consider this equation: Cheaper Price = Less Services
What do you get when you opt for the cheapest cell phone provider you can find? You end up with a lot of dropped calls, and less-than-satisfactory customer service (we’re not naming names, but we think you know which companies we’re talking about!). This is the same concept to consider when hiring a PMC.
Digital media seems to have made it easier than ever to obscure the fact that in the end, “you get what you pay for”. While technology advancements often do lead to improvements in the cost/benefit relationship, more often than not, you can’t spend cheap and expect premium.
This is especially true when hiring a PMC. While computer software and the internet has made it easier than ever to track information and communicate, people are still an integral part of the process. People are even more integral to the process when dealing with lower class properties/tenants and emergencies (think COVID)! Yet many rental property owners expect the same quality of service from property management companies that are priced differently.
PMCs are third-party help that a landlord or homeowner will hire to maintain the property, appease the occupants, and oversee the daily operations of their real estate portfolio. Their services are designed to take care of every aspect of their rental properties, from marketing vacant space, to signing leases, to collecting rent and coordinating repairs.
However, many property management companies perform great at these things during the first few months (the “honeymoon” period), but then stop answering the phone as time goes on. So the challenge becomes how to spot the difference between a PMC that’s wooing you, and one that genuinely provides quality service in the long term.
Consider thism, when hiring a PMC – the cheaper they are, the lower quality service you get, and the higher the chances of them costing you more (possibly quite literally) in the future.
How, you might ask?
1. Being so disorganized that issues fall through the cracks and cost you more money
When you’re hiring a PMC PMC, ask them what program or system they use to stay organized and operational. There are a million moving parts and responsibilities, so without a proper process, they’re going to mess up at some point.
If they are a budget PMC, they might have smaller servicing teams and more clients to attend to. That means less flexibility in their service or management. How many stories are on the internet about owners finding out a tenant hasn’t paid rent in months, yet their PMC hasn’t started the eviction process yet?
Not only are they busy, but how do they organize and stay on-top of things? How do they keep up with property showings, city inspections, payments, repairs, tenant screenings, and more for each portfolio and tenant?
A low-cost PMC won’t prioritize software like PropertyWare, Appfolio or Buildium that allows “customized workflows and fields” to help them adjust and keep track of requests. If an owner wants their property inspected once a year versus every quarter, the PMC should have a tool that updates the workflow for them (the scheduling, monitoring, documenting, etc.).
You don’t want to be stuck with a property management company that still uses Excel to slowly and painstakingly manage all their responsibilities. That’s being inefficient, inflexible, and unorganized–in stark contrast to a PMC that sees value in accomplishing tasks well.
2. Never being able to get ahold of your property management company
Nothing is incentivizing cheap PMCs to be proactive in attending to concerns. Just like how a lower class tenant will avoid anything that’s a hassle, cheaper PMCs won’t care much about completing tasks on time and thoroughly (as we said – lower cost = lower quality of service).
When things do wrong, or when a tenant refuses to pay rent, what will the low-cost property management company do? Will they truly do their best in handling the situation? Will they chase after the tenants and process evictions, if need be? You want your PMC to be proactive and responsible with your rental portfolio, otherwise you’ll end up dealing with issues like:
a. Making unapproved repairs with no documentation or proof: Have you ever gotten a repair bill from your property management company without any details of cost breakdowns? Did they not even ask for your approval before having the work carried out? This is a common problem with low-cost PMCs that don’t prioritize transparency in the service they provide.
b. Lack of communication: Perhaps the number one complaint we hear from landlords is that their previous PMC was nearly impossible to get ahold of – probably because they’re compensating for low cost with volume of clients, meaning they have next to no time to spare to attend to every landlord’s requests or questions.
3. Lack of updates: Many landlords complain that their property managers don’t update them regularly on the status of their property, like whether there are any late or unpaid rents.
A proactive PMC will also see the value of being prepared to cover everything you need from the get-go. If this means they’re charging a higher management fee (because of a wider service coverage), then the higher price is worth considering. The opposite is having an ill-prepared property management company that’s constantly cornering you into paying “additional fees” for services that should’ve already been included in the contract.
3. Not knowing what the heck is happening with your properties
Lots of landlords complain that after they sign with a PMC, they never hear from them again. The company doesn’t send them any documentation or update them with the maintenance work they do–and just sends a bill, with no details. Landlords don’t even know what happened! It shows that the PMC is only concerned about their paycheck, and not caring much about being your partner in management.
Property management companies being low-profile might sound peaceful to those that prefer to be hands-off, but the landlords end up not knowing what happens to their rentals at all. They don’t know the age or quality of fittings–the PMC might have replaced the faucet with a $40 plastic one that lasts only two years, instead of a $120 faucet that needs to be replaced once every decade. The landlords or homeowners will never know because their property management company wasn’t transparent with its management.
A quality PMC will document everything they do and automatically upload it into a customer portal for you to monitor. They will see the value in being aligned with you in all their management responsibilities. In LPM, we are as transparent as we can with our clients–fostering a purposeful relationship and providing top-quality management each time.
So, what are you prioritizing for your rental portfolio? What kind of management do you want to hire? Do you want to save a few hundred bucks a year for a PMC that will probably give you more problems than help, or can you now see the value in spending more for a PMC that prioritizes quality in service? The fact is, the less you spend, the lower quality of service you’re going to get.
When hiring a PMC, It doesn’t make sense to hire only to make things more complicated for you. Your PMC should cover all the services you need, at the professional level you expect!
Image Courtesy of Dinielle De Veyra