Educational Resources

Is The Cheapest Property Management Fee Really The Best Value?

Many people believe they can get something for nothing. Their wealth creation strategy is to play the lottery every week. The rest of us with a bit more common sense understand that this is just entertainment. If you want something worthwhile in life, you have to work hard for it. If you want quality, you have to pay for it. Just because something is cheap does not mean it has value!

Managing real estate is hard work and requires a large number of skill sets:

• Detail orientation
• Ability to work with numbers
• Aptitude for regulatory and legal matters
• People skills
• Negotiating skills
• Communication skills
• Mediation skills
• Sales skills

Given that you trust your health to the best doctors you can find and your liberty/constitutional rights to the best lawyers, it only makes sense to entrust your largest real estate investment to a first rate property management professional.

Obviously, the company charging the lowest fees will not provide superior service. They operate without a property plan, have no maintenance strategy, have poor response, refer tenants back to the owners, etc.

In extreme cases, some property management companies steal from owners in the form of embezzlement or skimming rent payments. In May of 2014, a Philadelphia property manager pled guilty to diverting funds in order to cover his mounting business expenses.

If you, as an owner, are not getting peace of mind, convenience, and value-added services that increase cash flow and maximize equity, what exactly are you paying for?

News items, such as the above, lead many owners/investors to believe that property managers are not worth the money and they are better off managing property themselves… and rightly so!

The whole point of hiring a good property management company is to delegate the day to day hassle, aggravation and property liability.

Quality property management companies will charge a bit more for their professional services, but will more than make up the cost in the value they provide.

When analyzing a property management company's services and fees, make sure to specifically outline their scope of services and what you are being charged.

Don't believe that the purely transactional as any real value. Companies competing on price are commodities. What these companies cost you in tenant turnover and poor service will make their "cheap" rates feel overpriced.

 

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