Property manager advice - PeachParts Mercedes-Benz Forum

alabbasi · #1 10-20-2011, 06:06 PM

I have a property manager that is taking care of my old home in Atlanta GA. The process as it stands is that he is the single point of contact between me and the tenants (i don't talk to them directly).

For the rent, our agreement has been until now that the tenants address a check to me but mails it to him. He then mails it to me and I pay him 10% commission for his services. This works for me as checks have been lost in the past and I can always ask for another check from them knowing that the original was not withdrawn. I'm also happy with the value I'm getting as I want eyes and ears on the ground in Atlanta to watch my home.

Recently, the rent payments have become erratic which he blames on the postal system. To address this, he wants to change the payment process so that they pay him directly into his account and that he then pays me electronically.

I suggested opening a Chase account as they own my mortgage which will allow me to make photo deposits of the rent check. This eliminates post and should streamline the process. He is resisting that and has indicated that if I don't do it his way, he will have to raise his fees.

I can't help but feel uncomfortable with any arrangement where someone who should get a 10% cut asks for 100% of the money so that they can pay me the 90%.

We've had a good relationship until now, should I be concerned?

t walgamuth · #2 10-20-2011, 06:59 PM

I'd like it better if the money came to my account and I paid him when I got it. Heck you can pay him automatically whether you already have the rent or not. If you are getting the large check you can afford the small one. I sold off one of the living units in my building (3 actually) and now am managing two of them for the owners. We do it as outlined above.

If he is not comfortable with that I would probably get another manager. With the state of the economy you can surely find others.

TylerH860 · #3 10-20-2011, 07:15 PM

Sounds like his proposal is trouble. Gives him an opportunity start making excuses why the tenants are behind and start pocketing the checks. Not saying he'd do that, but the chance is there if he starts getting in trouble himself financially.

If you opened an account with Chase or another national bank, he could just deposit the check for you at one of the branches in Atlanta.

Perhaps he's a bit old school and doesn't like technology, or would have to buy scanning equipment, computer, etc and learn how to use it all.

kerry · #4 10-20-2011, 07:19 PM

I wouldn't agree to it. For instance, he could tell the tenants you raised the rent, charge them more but send you the former amount. The postal system explanation is not convincing either.

layback40 · #5 10-20-2011, 07:25 PM

10% is a lot !! 4% is the norm in Australia.
There is no reason why they cant make direct payments to your nominated account & then you direct pay the agent in a similar way.

kerry · #6 10-20-2011, 07:43 PM

Quote:

Originally Posted by layback40

10% is a lot !! 4% is the norm in Australia.
.

Man, that's low.

Hatterasguy · #7 10-20-2011, 08:01 PM

He is opening you up to potential loss by doing that. Maybe he has a new girlfriend or likes to gamble, or whatever, but with what he is suggesting it would be set up perfectly for him to take what he wants.

Tell him he works for you not the other way around and you will cut him his 10% check. If he doesn't like it have someone else do it.

alabbasi · #8 10-20-2011, 08:41 PM

Thanks guys, i'm sure there is nothing to be concerned about, but it's good to know that i'm not out of my mind for not liking the idea. i'll stick to my guns.

layback40 · #9 10-20-2011, 09:54 PM

Quote:

Originally Posted by kerry

Man, that's low.

Over here they dont do much for it. Most pay the rent to the agent, often cash. The agent banks it, & at the end of each month sends you your cut.
Provided the $$ are coming in they dont go near the place. Thats why so many here do it direct. I had 3 rentals here in Australia while I was working on your side of the pond. Never used an agent. Trick is to have good property & so good tenants. Non smokers, no kids & no pets.

LandYaghtLover · #10 10-21-2011, 01:18 PM

More than 10% is not in your interest. But 10% is normal for a small property. The larger the property, the smaller the cut the management takes.

We take all rent to ourselves from tenants. Then we take out all deduction before paying the landlord. But we are a management company, not an individual. Having the rent come to us and payable to us makes things a lot more practical for all parties. If rent is late, we take action (5-day notices with problem tenants). If it bounces, we take action. It also insures that we get paid for our services.

If we had to have the checks made to the owners but received them, then mail them out it would be a headache since we manage a large number of duplexes, houses and apartment complexes. Not to mention all the sorting and postage. Just not practical. And if a check were to be a bad one, and sent to the owner, it could be a month before it all gets sorted out.

I would suggest you find a management company larger than one guy. Or someone that manages many properties. What he is asking is not uncalled for, but once you loose trust (and you have by the sound of it) then the relationship is over.

spdrun · #11 10-21-2011, 01:21 PM

Dump the SOB and just keep a handyman on call for emergencies. Property managers are parasites, nothing more.

LandYaghtLover · #12 10-21-2011, 03:13 PM

Quote:

Originally Posted by spdrun

Dump the SOB and just keep a handyman on call for emergencies. Property managers are parasites, nothing more.

I would have to disagree. In fact, we have had more issues with handymen!! They love to bid a job then come out three times are much when done. Glad we have internal maintenance now.

alabbasi · #13 10-21-2011, 03:18 PM

All

My PM Is a one man show. He is a realtor by profession and does this as another service. If there is any work to be done, it will get sent out to a contractor, in the past, he arranged for the quotes and I paid the contractor. He now also wants me to pay him and he pays the contractor.

t walgamuth · #14 10-21-2011, 03:23 PM

Quote:

Originally Posted by alabbasi

All

My PM Is a one man show. He is a realtor by profession and does this as another service. If there is any work to be done, it will get sent out to a contractor, in the past, he arranged for the quotes and I paid the contractor. He now also wants me to pay him and he pays the contractor.

Again, it is in your interest to pay the contractor direct. If your PM is not honest this method can be circumvented as well so if you have lost confidence in your PM better get another one.

alabbasi · #15 10-21-2011, 03:28 PM

Agreed, I'm not quite there yet. My only concern is that the lease is signed between the PM and the tenants. If I fire the PM, I'm not sure where that would leave the tenants.