A traditional quotation on residential rental properties usually means a percentage of monthly rent, plus at least ½ of the first month’s rent when a unit is leased, plus a billing of all expenses associated with advertising, maintaining, and repairing each unit. In addition, you may fine end of the year tax statement fees, annual administrative fees, annual lease renewal fees for the same tenants. When putting together our company Todd, decided to never discount our services and to never to turn every aspect of the business into a profit center and thus charge “hidden” or add-on fees.
While we are open to a traditional fee structure we have found that most of our current owners have elected to go with our “gold standard” flat rate fee structure because it benefits everyone involved.
A Flat Rate System – “The Gold Standard”
You may be interested in regularizing as much as possible the fees associated with using a professional property manager. Ask about our unique “flat rate” gold standard management. When Todd had other property management companies manage his properties, the traditional fee structure drove him nuts. It seemed to reward the property manager (with ½ months’ rent) for turning his property over each year, and turnovers are expensive. Our flat-rate fee structure rewards us for finding and keeping great tenants and when they do turn over we always attempt “quick turns” by using some innovative leasing structures and hard work. Our fees usually turn out to be about the same as property management firms that use the traditional method, but we also include the small maintenance items that owners typically take care of themselves – for instance when tenants let us know their toilet is “broken” – we do not send a plumber or even a handyman out – our maintenance crew goes out to assess the problem. If it was a toilet flapper problem that we solved in 5 minutes – then there is no labor bill or trip charges for the owner! If it is something we cannot solve in-house, then and only then will we involve a vendor – of course at this point we can help save money because we know much more about the problem. In addition, we only use vendors who do top-quality work, know how to get things done in a timely manner, and know our standards.
Finally having someone from our team of maintenance techs or property managers visit the property to assess a problem also has several other benefits:
1. We can provide appropriate response times for the level of the problem.
2. We complete a checklist making sure your rental property is being well taken care of by tenants and by us. Therefore we typically do many more walkthroughs per year than would be independently scheduled.
3. Our visit develops a more personal relationship with tenants – they get to know our team as opposed to numerous third-party vendors.
Proactively, we also visit the property two times per year and complete our fall/winter and spring/summer checklists – for instance, as soon as the leaves come off the trees we will be up on roofs cleaning them, treating for moss, and cleaning out gutters. We also make sure hose bibs are covered, irrigation is appropriately winterized for our area, and the property is ready for winter. We reverse the process in spring. . . Typically each of these services would cost more than $150 each (totaling over $600 at other property management companies but is included in our flat-rate system.
Let us know if you have questions and remember it is all about your bottom line not top line.