Exterior shot of a suburban home

Property Maintenance: How Your PM Company Does It

By: Steve Hembree
November 21, 2021  | ,

There are a few variations on this but to start a management company does not pay for your repairs on your property, you do. The average management fee a management company receives is $175 a month. If there is one repair on your property for one month for $275 that means the management company loses $100, how would they pay their staff to answer your phone calls? So, you can see on its face it’s a pretty silly assumption, but many first-time landlords think we do. However, let's talk apples to apples here because apples to aardvarks would be weird. So, first, clarity.

Contractors VS Do-It-Yourself Maintenance

If you are an owner and you own over 50 properties, then it may make sense to have your own contractors on staff. That is, provided you - and they - carry ample insurance, your contractors have good skill sets, and you have a lot of time set aside to dive deep into the minutiae of problem-solving.

However, I have found that, like us, most professional property management companies use outside contractors. Yes, the property management companies pay the contractors. Those payments are made from your reserve account held on behalf of the property owner which is usually $250 to $400.

So why is this?

Household repairs, we all do them, right? Most of us do, anyway. I'll let you in on a little secret: I can fix almost anything with the help of YouTube, but will my repair be professional grade? Sometimes, but not always. That is because I am not trained to do that sort of work. And odds are there are items you really should not touch either. For me, it's drywall, keep me WAY far away from it!

There are a few variations on this but to start a management company does not pay for your repairs on your property, you do. The average management fee a management company receives is $175 a month. If there is one repair on your property for one month for $275 that means the management company loses $100, how would they pay their staff to answer your phone calls? So, you can see on its face it’s a pretty silly assumption, but many first-time landlords think we do. However, let's talk apples to apples here because apples to aardvarks would be weird. So, first, clarity.

If you are an owner and you own over 50 properties, then it may make sense to have your own contractors on staff. That is, provided you, and they, carry ample insurance, your contractors have good skill sets, and you have a lot of time set aside to dive deep into the minutiae of problem-solving.

However, I have found that, like us, most professional property management companies use outside contractors. Yes, the property management companies pay the contractors. Those payments are made from your reserve account held on behalf of the property owner which is usually $250 to $400.

Contractors are trained for their respective trades. And general contractors? Fuhgeddaboudit, they know enough about many trades, but even they hire out on many items. This is because you "want the right tool for the job." Or the right person.

 

From our perspective, as a professional property management company, there are a few goals to achieve:

  • Fast service
  • Accurate assessments of the scope of work
  • Competitive prices
  • Repairs completed correctly
  • Keeping the resident happy so you reduce vacancies and raise rents moderately

We can't stress this enough:  It's important that your contractors are insured. Also, a good contractor will not do any work that jeopardizes their license. Think about it, that is their livelihood. That is why we at Management One only use licensed and insured contractors. Contractors receive no new work if their license, or insurance, has expired as the computer locks them out.

This is for your protection, as well as ours. Should someone be injured from work a contractor performed, that can be covered by the insurance policy the contractor carries and pays for. This protects you and us, and as for the contractor, they do not want claims either. I cannot overstate how important this is.

Fast service is also an imperative. Regardless, if you are a renter, or you own your property, it is pretty frustrating to call someone for a repair only to be told, "well, we can slot you in a week from Thursday, between 11 and 6..."  Cable companies, I'm looking at you...

However, we, on our end, will assess the severity of the issue right upfront. While it is the contractor who will assess on-site, and ultimately complete the repair, we will triage the service request on our end first. Of course, water gushing through the house will get preference over a dripping faucet somewhere else. The faucet issue is not unimportant. The best qualified and faster-responding contractor will be sent to respond to the gushing water first, it is more urgent. Nonetheless, speed of response is still important, regardless of the actual item.

Top Contractors in OC

What do top contractors provide? The Management One stable of contractors can always be counted on to provide:

Accurate Assessment

If you have ever had car troubles, you know that said symptoms of the troubles could be this, that, or the other thing. The battery is dead. Is it old? Was it charging? Is there corrosion on the terminals? A trained professional will drill down right now as to the likely cause, and more often than not they are right. It works the same way with professional contractors.

Abnormally high-water bill? Check running toilets, check leaking faucets, check for leaking sprinkler valves. Do a meter check (is it moving with no water running?) Check for floor hot spots indicating hot water slab leaks.

If one knows what to look for, they are much more likely to find it and find it faster. It is a professional contractor's job to know stuff

Competitive Prices

No one wants to overpay for anything, and we don't think you should. We chose our contractors carefully. Also, every invoice that comes in is checked, top to bottom. You see, we view your money the same as we view our own, if it doesn't need to be spent, then don't. Just don't.

We also have in place other checks and balances to ensure that prices are kept correct and competitive. For example, we have 650 repair items that we already have priced out. Going back to the mechanic example earlier, everything you have a mechanic fix has a book rate. The parts cost, the markup, the labor on work hours, and the labor rate, this is all calculated.

We have that too. We spend an enormous amount of time, energy, and labor to create this price list, and we do expect contractors to agree and adhere to the pricing. If they don't, then we cannot do business with them. We also update the price list every year.

This is to protect the property owner, and indirectly, the resident as well.

Repairs Completed Correctly and on Time

Another of those checks and balances mentioned above is this: Contractors, with very few exceptions, must take before and after photos of that which they repaired.

Picture this: You're on holiday and you check your owner portal. Yes, we have a portal that will let you view your property information at any time of day, from anywhere in the world. You log into your portal, and you see a $159 transaction was paid for a repair at your property. Of course, you're wondering what was done.

Not only will you see the invoice itself in the portal, but you will also see what work was done. The invoice will explain the work, the cost, the warranty, and photos will show you before, and after, the item - or items - that were repaired. You can tell, immediately what occurred. By the way, an invoice appears on the owner's portal site only after it has been thoroughly checked and approved for payment. In a way, we have skin in the game too, because if you're unhappy, we will have to answer for that.

The Longer Short Answer

So, do we, the property management company, pay the contractors? Well, we pay them for you. On that note, we also field the work order request, find the contractor to take care of the issue, follow the process to start to finish, and ensure the work is done, done right, and done for a competitive price.

You see, we do have a vested interest in keeping your property maintained, and your resident happy, as much as we can. Furthermore, we are acutely aware that your investment is just that: a home you own that will, over time, give you a return on your investment. And our contractors indirectly have the same thing in mind, to a degree. They want the job done right as a matter of pride, but there's more.

Just send Billy the Craigslist Handyman.

Sure thing! Billy will be carefully vetted, just like any contractor. No insurance? Hard pass. No license, no thanks.

Additionally, I must add a word of caution: Not everyone who advertises that they can do a particular task, actually can. I know you have heard the horror stories about contractors who asked for "half upfront, you know, for materials..." who then disappears. We have to. It's real, folks, it really does happen. But not to us. Those toothpick chewing, shadow lurking, side of their mouth talking characters are not what we are looking for.

When it comes to your investment property, let the professionals handle it. Maintenance, accounting, leasing, legal issues, we have you covered. You have more important things to do, like growing your portfolio.

By the way, ask us about our series of owner investment webinars! They are very informative, and you will almost certainly come away from them with a ton of solid working knowledge!

Talk to Us About Your Property Needs

Still uncertain about property management? Give us a call to see if we can help.

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