Property Management Ripoffs? What is Your Experience/Opinion?

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Real Estate Agent with Florida Property Experts
    Daytona Beach Real Estate Blog by Lisa Hill, "The Smart Choice" for all your real estate needs

buy Daytona Beach Shores condoThis morning I received a call from a real estate buyer who wants to buy a condo in Daytona Beach Shores or Ponce Inlet. He had found my web site and wanted to get setup on our automated MLS program, that will send him listings via e-mail. It's a fantastic feature in the the Daytona Beach area MLS!

As I was speaking with this real estate investor, we were discussing his options, his criteria, his past real estate experiences, etc... normal real estate chit-chat. Then he mentioned something that got my attention. As we were talking, we were discussing how we were going to find him a condo with ocean or river views that was NOT a "condotel", that would allow him to rent the unit for a term shorter than 30 days. That's a tall order around here since the year-round residents don't want their buildings to be too transient. The longer someone stays in a unit, the better the care they tend to take of it.

Moving on to the title of this post... this particular real estate buyer owns a few properties that he rents out and manages himself. All he needs is a few names and numbers of people to call if or when something has a problem... IE: Air conditioning, refrigerator, carpet cleaning, etc. And since he and his family will be using the condo as well, there's always someone who can come down to check on things. And these are the only types of clients I have if I'm renting a unit, after selling it to them, since I am not in property management (nor do I have any desire to ever be involved in it). But this real estate buyer happens to mention some of the fees that one property manager wanted from him, as well as the demands they were attempting to make on HIS real estate for rent. I was shocked!

Now maybe I shouldn't be shocked. As I've already stated, I'm not a property manager, and I have no interest in that side of the real estate industry. But I wanted to share this list of fees and demands with my fellow real estate bloggers, to see what your thoughts were.

Before I state these fees, I will say that I'm well aware of how demanding some tenants can be! That is precisely why I have sell Daytona Beach Shores condono interest in being a property manager! I already know I do not have the patience for several things that would be inevitable ;-)  So here is the list of "demands" that one real estate agent/property manager wanted from this real estate owner, in order to manage his property for him...

  1. They would change all the locks.
  2. They would have ALL keys!
  3. They would take over ALL control of the property. (This real estate owner felt like he was being pushed away from his own investment.)
  4. The property owner would not be allowed to choose his own service people for the pool, lawn, carpet cleaning, or any other maintenance. The property managers would only use their own people. (Obviously, the real estate owner was looking for ways to save money... and from all appearances, the property manager was looking for more ways to put money in his or her own pocket... and I haven't even told you the fees yet! (Feel free to correct me if you know otherwise! I and this investor can only specuate at this point.)
  5. The property manager expected to be paid between $300 & $600 per month (depending on the condo unit they would be servicing) PLUS an additional 18% for all those services, for which the seller could not choose his own people, to find someone more affordable.

OK Property Managers. Here's your chance to explain this to the rest of us who are not involved in that end of the business. I personally have rented condos and houses for previous clients to whom I sold the real estate they now wanted to rent. But I made it clear that I was not a property manager, and I was hired strictly to find them a tenant for their investment. I did so by using a listing agreement, and eventually a lease, that I found on www.FloridaRealtors.org, that had been drafted by the Florida Association of REALTORS®. Yes, I did a little bit of extra work, such as let a carpet cleaner in to clean the carpets, without charge to my client/owner, because I wanted to go the extra mile in providing good service. But my listing was a percentage of the gross amount of the lease. Period! So I'd like to know, for my own knowledge, is this list of "demands" that was given to this real estate investor, a standard list of expectations on the part of propety managers? Or was someone getting greedy!? Because this propety owner was not going to make any money at all on his own investment, by the time he paid all these fees, and he was not given the option of choosing his own service people either.

The way I see it, if this is what has been "the norm", it's not wonder the face of real estate is changing, across the board, causing so many new business models to be introduced.

So what are your experiences, either WITH property managers, or AS A Property Manager? And if there are any consumers reading this post, please feel free to weigh in. I'd like to see the big picture, from all sides.

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This real estate blog post has been written by Lisa Hill; "The Smart Choice" for all your real estate needs. If you're considering buying or selling real estate in Daytona Beach, Port Orange, or anywhere in East Volusia County, I'd love to help!

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Rainmaker
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Robert May
Robert W May - Lethbridge Real Estate - Lethbridge, AB
Real estate consulting

I offered property management for a few years.  We did it partly for a bit of income, but primarily as a service for our clients and as a method to locate revenue property buyer and sellers.  It was good for a while, but the legalities of dealing with bad tenants was eventually more of a headache than the income was worth.

Oct 14, 2009 08:33 PM #1
Rainmaker
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Elizabeth Cooper-Golden
Huntsville Alabama Real Estate, (@ Homes Realty Group) - Huntsville, AL
Huntsville AL MLS

Lisa, There is no way I would give up full control over a rental the way this property manager is suggesting.  Sounds like a poor way of doing business.  True, some folks want no part of managing their own properties, but to set down a set of restrictions listed above is just crazy. I'm with you! Sounds like a bad move.

Oct 21, 2009 03:47 PM #2
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