Quote:
Originally Posted by 1stTimeLL
Thanks. I will be out of state, and working a job that requires international travel once a month. As such, doing it myself just does not seem to be a viable option. My CPA, realtor, and family lawyer are all guiding me on this. Their opinions are mixed on if I need a PM or not. But being out of state and not knowing what I'm doing, I think I really need to go for it. There is enough of a buffer between my monthly mortgage and going rent that the monthly fee doesn't seem prohibitive.
I'm going to check the heck out of references for these companies, but I'm attracted to one that has a fairly basic fee structure compared to the others, who seem to nickle and dime for a lot of things. They charge me $400 for a "one time setup fee", and then 10% a month while filled. They handle all marketing costs. I will need to put $250 into a maintainence account and they will get authorization on any repairs that isn't covered by that amount.
Does that seem reasonable?
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That sounds reasonable.
So quick math says that at the high end of potential rent you will have around a $6400 buffer and at the low end you will have a $3100 buffer?
How are you going to rent? Yearly or monthly? Does your property have a lawn that will need to be maintained and will that be on the tenant? 10 weeks of cutting a small lawn by me will cost over $2500 in a 10 week period.
Do you have mature trees? Are your gutters capped or do they need to be "maintained" yearly (fall/winter due to leave/ice?) Who is going to do that/pay for that if that is an issue?
Just think of everything you do to maintain your home or pay someone to do for you, and subtract that from your buffer.
Are you leaving your appliances? Are they in good repair (new-ish)? Even one call to a "fridge" guy who works for the manufacturer can cost a pretty penny. That could easily wipe out out at least half of your $250 maintenance account if not all of it. For labor. That never seems to be included in the warranty.
If you're willing to take the risk of breaking even, go for it. If you aren't willing to take a loss, and have no idea when the market in your part of the world will demand what you are asking to sell your property, you might want to reconsider. Hopefully it all works out and you make a profit. I think it's harder to do so when left up to someone else to tell you what the issues are, and you don't get see it for yourself or take your own bids to fix the issue.
Do you trust a PM company to give you a referral to a client who was unhappy with their services? Tenants don't give potential LLs references who they didn't pay rent to for 6 months or destroyed the premises. So I wouldn't be expecting to hear anything other than sunshine and roses from the referral base the PM gives you.
I have friends who moved to Ca for 4 years (military). They didn't want to sell their house b/c not only were they were underwater at the time (VA loan - interest only) they wanted to come back to the east coast when the husband retired @43. So they rented it out through a nation wide RE company that also has a PM division.
Long story short? They moved back east about a year ago and back in to their house and were out close to $15K through owed rent and damages. Filed in civil court and just got a lien put against their ex-tenants new house that he bought. That is in a suburb close to a very large city and costs him close to $1M.
The PM company didn't do any sort of a background check that ran deeply enough to find the scam this renter played. He's a big wig "Gospel Preacher", has a $20K Harley (posts pics of it on his twitter) and his wife walks around in red backs and carries LV or Gucci - and not the ones that you can buy on Canal St.
Due to a clause in the PM "agreement", the PM company couldn't be sued. Overly apologetic, but did NOTHING about who they put in my friends house and how much it cost my friends at the end of the day.
So if you do go with a PM company? Get the names/addresses of potential lessees and buy yourself some peace - find a paid for site that will pull up criminal records/liens/ judgements/bankruptcies.
I wish you the best of luck and I hope it all works out in your favor!
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