I am starting my second year of MAILING out quarterly 3-panel direct-mail brochures to a target farming area of 400 absentee/landlord property owners. I have started 2 property management firms from SCRATCH so I know this method of attracting business works. This method gets me properties I WANT to manage rather than properties that are not suitable to my management portfolio.
As a result of receiving one of these brochures, I received a call in the fall from the owner of a VERY DESIRABLE townhouse that had been used as a model for the developer. The developer had given notice and would be vacating the townhouse in early March.
I sent the property owners my rental/management proposal and 2 copies of my 3-page management agreement. I followed up a week later with a hand-written notice indicating I was looking forward to working with them.
Last week I received another call from them and they had a definite move-in date for new residents and wanted me to get started * call the developer and take photos of the property, start my marketing routine, etc.
I asked them to sign and return the management agreement I had sent along with a check for their owner fund (many newbie property managers don't charge this fund and I have learned this mistake the HARD $$$ way). I indicated that if they did not have it, I could provide it via pdf and they could sign electronically.
Their return e-mail was surprising in that they would be CHANGING my management agreement. OK....I stopped my processing of the listing and awaited the snail-mail. I received their agreement yesterday.
They had marked out the need for owner funds, marked out my performing maintenance, marked out some insurance requirements.....3 BIGGIES in my experience.
I would have negotiated my management fee and we had already discussed the owner using their own maintenance personnel with my vendors as backup; however, I am NOT going to be stuck for repair charges or expenses if there is no money in their owner account NOR am I going to be fighting with them and their insurance company for coverage under their policy.
I e-mailed them my concerns yesterday * I suspect they may respond as my e-mail offered some suggestions as compromise; however, if I do not, I'm sending out another direct-mail effort in February. I'll keep them on my mailing list!
Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.
Central Virginia
LandlordWhisperer
View our available Charlottesville, Albemarle and Lake Monticello rental homes online with photos and floor plans
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Sounds like you have a proven business model that works. I can see why your uncomfortable with the changes in the contract. I believe many times the landlords don't fully understand what's involved in property management.
I have seen many choose to manage their properties long distance and they get very frustrated. I have also see the property manager take the trust account and disappear.
Good property managers are rare and valuable service. I tell clients to seek out and hire the best.
Mark * thank you for your post. I agree and while these are seasoned/savvy landlords, their way of managing their rentals does not fit with my property management program and although I'll make some concessions, I'm not exposing myself to $$$ damages from tenants or vendors because I can't pay bills or am not covered under their insurance.
Good morning Wallace,
You are right on the money and I see you owe your firm commitment to your past experience. Trying to find a good property in today's market place is difficult. There are many with no experience but would have signed that immediately to have something going. Good job and great post!
Very good Wallace. I got started in this buisness by managing properties. There is nothing worse than trying to collect funds for repairs after the fact. Having an owners fund is the only way to go. These folks certainly sound like trouble down the road.
Dorie * than you for your kind words.
Bryant * I VALUE my vendors and service personnel more than a client. I don't order service if I have to chase the $$$ to pay the vendor.
I had my service personnel measure for blinds for a HUGE new property. Once I signed the lease and had a move-in date, they ORDER and install the blinds - that way we BOTH are NOT stuck for $$$ to the property owner's benefit
Wallace,
Great post. I love the way you handle business. I like to work with folks, but having said that, I would be at the point of not wanting them as clients if they want to change everything I do.
I had to fire an owner a few months back that wouldn't allow me to keep up the property and by keep up I mean functioning heating and air!
Also, one other thought that came up is if the potential clients - owners or tenants ask for too many items to be changed, it concerns me that they are high maintenance people I won't be able to make happy throughout the process no matter what I do! Any thoughts?
All the best, Michelle
Michelle * we spend 80% of our time on 20% of our clients and their properties. Learning how to say NO EARLY helps us focus on the business that gets us business.
I spent 2 hours Sat morning setting up 2 new properties, inputting information in my computer, making file folders, organizing photos, etc. Many property managers charge a set-up fee. I'm not there yet; however, I am aware of the TIME involved in not only GETTING, but KEEPING properties when I don't get PAID until they are rented!!!
Wallace. I am so proud of you! You make us look SO GOOD in this Property Management group... keep them coming! I will be bookmarking this post for later reference. Thank you!
Diane * thank you. It's hard to not let getting BUSINESS get in front of getting GOOD BUSINESS!!
Hi Wallace,
Do you keep all owner funds in the master trust account?
Also, how do you ensure you are not hit with bounced checks? Do you wait for the check to clear in your trust account, before deducting the management fee, and mailing out a check to your client?
Keep up the excellent posts - I read each one!
Bryan