Ep011: Can Your Property Manager Control Rehab & Maintenance Costs?

Chris: Hello everyone and welcome to the Landlord Profitability Playbook Podcast. I’m Chris McAllister and I’m here to help you create and coach business opportunities and strategies that support and add value to the lives of residential real estate investors. Joining me today are my trusted co-hosts Laci LeBlanc and Gretchen Mitchell. Good morning, ladies.

Laci: Morning, good morning.

Chris: Today we’re diving into part four of our series called what to Expect from your Property Manager, and today’s episode is titled Can they Control Rehab and Maintenance Costs?

Rehab and regular maintenance are the two things that absolutely make or break landlord profitability. We’ve been doing this for quite a few years and everything, it seems, comes back to having to fix things or having to get things cleaned up between tenants, and it’s the thing that just crushes the hopes and dreams of our owners and it doesn’t do much for our team either. So before we get started, I wanted to just talk about something that I came across the other day. I try to listen to a lot of podcasts and read a lot of blogs about different property management companies. What they put out there and this actually came from Property Meld, and Property Meld is the vendor that we use to schedule and track maintenance needs in occupied units and one of the folks that works at MELD had a post out last week I think it might’ve been on LinkedIn, but it’s stats about the cost of a MELD five years ago versus the cost of a MELD today.

Laci: So for those of us who don’t property manage all day, every day, what is a MELD? Define a MELD for me, please.

Chris: Well, gretchen, you go ahead, Tell us what a MELD is, so a.

Gretchen: MELD is the same as a work order, so it’s a request from a tenant or an owner to get something repaired, but property MELD uses the word MELD, so that’s where he’s using the word MELD.

Laci: As a marketer, I really appreciate that. Good for them.

Chris: Yeah, but here’s the thing In 2018, the average cost of a work order or a meld as Property Meld phrases it was $272.87. That’s how much it cost on average for a property management company to send somebody out and fix something in a rental unit. That price went up in 2019 to about $312 per mil. 2020 was $340 per mil. In 2021, that cost went to $377. 2022 was $442. It was $407.

And in 2024, thus far this year, the average cost of a work order across all of the properties and all of the owners and all of the tenants that property meld services is $5.01 for the average cost of a meld. That’s you know it’s not quite double, but my goodness, it’s getting there, and I know our owners are feeling it and we’re feeling it too, because you know, if I’m just going to be absolutely honest, you know we have raised our prices on repairs and maintenance, but we certainly haven’t kept up with this trend and we’re doing our best to keep those costs down, and it’s something that you definitely want to have a conversation about with any property management company that either you’re currently working with or you’re considering working with. But $501 per mil how does that strike you, gretchen? Does that surprising or does that?

Gretchen: feel right. I actually really love this information because I’m going to start using this when I have initial conversations with people Because, like you said, maintenance and turns is what really sucks up an owner’s money. So if they know this, going in and understand it, it’s going to be very helpful. But it does make sense. Things have gone up so much and we do hear it from owners A lot of times. There’s a lot of pushback on why does this turn cost so much? Well, this is truly just the quote that we got, and so sharing this with them is going to be really helpful.

Chris: Yeah, and turns have gone up just as dramatically. It’s just basic maintenance, occupied units, I mean. So it is scary. So one of the things that I thought we should talk about today was what can your property management company do upstream, what can they do proactively to try to control maintenance and repair costs down the road?

I think one of the easiest things that we’ve talked about before in prior podcasts is it really does come down to doing a great job screening and selecting tenants. You know we’ve talked about before that. Yes, we want to. You know quote we want to screen in. We don’t we screen in, we don’t screen out.

But you know part of our goal is to screen in tenants that, of course, will pay the rent on time. Screen in tenants that, of course, will pay the rent on time. But we also look to see what kind of history they have in terms of, you know, how they took care of the property or how they left the property when they moved out. And that’s why it’s critical that your property management company doesn’t just stop at a credit report or, you know, paid for a background check, that they take the time and trouble to at least try to contact prior landlords and get a feel for whether or not they took care of the property. We try very hard to, you know, instill in people that you know, yes, we expect you to pay the rent. Yes, we expect you to buy by the terms of the lease and, yes, we expect you to leave the property at the end of that lease in as good or better condition than when you took it on.

Gretchen: So I do think it’s a little fuzzy, you know it’s a little feel good, but I do think it matters that we set expectations up front with everybody we rent to and when they move in, we make sure they understand this is how you email it in a work order request. Make sure they’re very comfortable with using that portal.

Chris: Yeah, I think that’s critical too, that they know how to get help, but I also think it’s absolutely critical that we just make sure that they understand our expectations.

And then there’s other things that happen, and I’m guilty of this too as a landlord. You know there are things that landlords can do from a preventive maintenance standpoint that we just don’t really want to pay for right. They’re just as simple as cleaning out the gutters every year so that the rain doesn’t pool along the foundation and leak into the basement, or, you know, changing the furnace filters. You know you can try to leave that the responsibility of the tenants, but it doesn’t really. You know it doesn’t work all that often. But you know, preventive maintenance is also critical, and that’s one of the things that I’d like to see our rehab and maintenance team get better at is identifying those places where you know a little preventive maintenance will go a long way, and making those services available, you know, to our owners. And again, if we can do it at a reasonable cost to competitive costs better than competitive cost, you know then we want to provide that service to our owners costs better than competitive costs, you know, then we want to provide that service to our owners.

Laci: I think this is a very, a very interesting conversation, given kind of the way society is moving and the shelter business that you guys are in, because now, if you look at kind of the statistics, if you know, if you pay any attention to the news, you can see that you know, us millennials are not all interested in owning a home ever, right.

Some of us I do own my home, but some of us are not interested in ever owning a home.

We like the concept of renting, we like the concept of. You know, one of the main keys of that is we don’t have to do all of the maintenance right. We don’t have to have $10,000 in the bank in case we need something big right, in case our HVAC goes out or we need a new roof or a sump pump installed. So I think that striking that balance between landlord you know responsibility and tenant responsibility, and being really clear on that from the get-go just like you know Gretchen said and you said you know, kind of making sure that tenants know what their responsibilities are and you guys, you know, follow through and know what your responsibilities are. I think that’s a really interesting concept and I don’t think that it’s something coming from a family of you know property owners, landlords. I don’t think that it’s something that most property management teams or landlords do that well. So I think it’s interesting that you guys are having that conversation and really kind of clarifying that for people.

Chris: I think that’s going to go a long way, especially, as you know, the generation up and coming that would have been buying homes now are deciding that they would like to rent long term think that it’s necessarily everybody’s aware that, yes, interest rates are driving up rents because it costs more to, you know, borrow money, pop taxes continue to go up based on the value of the homes. You know, increasing Insurance has gone through the roof. But it’s also the rehab and maintenance costs that are driving rent and you can’t have, you know, a MELD work order, you know, almost double in value, and not see that at some point play into the amount of rent that has to be charged, basically all the way across the rental market. So when you think about how do you set the stage to make your tenant a partner, and some of this, I just want to make sure we discuss some of its pet peeves, some of it, you know. Again, I think it just bears getting out in the open and having an open discussion with your property manager and it’s something that we need to be discussing with our owners. So, first of all, when we talk about setting expectations, we do have a really nice little brochure that we share with all of our potential tenants. It’s called Rent with Roost and again, it outlines exactly what they can expect from us and it outlines what we expect from them, and we’ll put a link to that in the show notes.

But a couple of things that I feel like get in the way of setting the right expectation up front with a potential tenant is and, gretchen, I know we’re kind of dealing with this now, but it’s very hard to have a rental property on the market and available for lease when the current tenant is still in there. Right, it’s different than if it’s a homeowner that wants to sell their home and they’re showing their home. They’re going to put something in their pockets but you know, a tenant basically has no obligation whatsoever to show their property. You know tenants rights dictate that they don’t have to let anybody in that property while they’re in the lease. So I think one of the mistakes that landlords make is trying to, you know, show a property while the current tenant is still in there in hopes of getting a new tenant in there.

Part of it is, there’s the aggravation factor and the annoyance factor and the tenant is definitely going to be putting out the vibe that they’re being put out. The other thing is who’s to say that the current tenant, if they feel put out, is going to have the house neat and tidy and is going to be allowing it to show in its best light. So that’s something to be aware of. You know a lot of us want to mitigate any downtime. We don’t want to lose a month’s rent. So you know it does happen and you know there are. I’m sure there’s some situations where it works, but it’s just something to keep in mind and I think it’s something to discuss with your property manager potential property manager if it’s something that you feel strongly about as an owner.

Gretchen: The other thing, too, with the frustration is you, we can go in and show it to a potential tenant, but we don’t have a set move in date, because things look totally different when a resident moves their items out. We don’t know what’s behind the couch, we don’t know about any underlying issues that maybe they hadn’t shared. So it’s you get a lot of activity as soon as you put the sign in the yard and then for it to be delayed well, I don’t actually know when you’re going to move in. It kind of defeats the purpose of everyone getting excited about a brand new listing out there.

Chris: Yeah, the best case is that you know the property management company is able to get control of the house the day the previous tender moves out. The locks get changed, the inspection is done, they get a feel within 24 to 48 hours exactly what it’s going to take and what it’s going to cost to get that back in service. There’s a conversation that’s held with the owner. Owner says, yes, things get done and, best case, you’re only going to be out maybe a month’s rent, maybe two on average, but bear in mind the national average.

Nobody ever has 100% occupancy or 0% vacancy and one month out of the year is roughly a 10% vacancy. But if the average tenant stays in a property for three years, you have to factor in that every three years there’s going to be not just some costs for rehab but there’s also going to be some vacancies. So you know to have two months rent, two months vacant every you know, three years, that math isn’t as horrible as it feels in the moment. You know to. So it’s again, it’s about being realistic about the cost, being realistic about what it means to be a landlord, being realistic about you know what vacancies really are and look, looking like and planning for them.

Laci: The other thing that’s of that like that right, tenant right Outweigh those two months of the rent by far right.

My family just said goodbye to a tenant who was there for almost 30 years. Like we did the math and he could have paid for that house three times, like bought it three times, you know, and and he left it better than he found it. He did a bunch of upgrades, it was always clean, the yard was beautiful, you know it. Just the value of having that right person in there. You know, when you think about, gosh, if I had just spent an extra month right, getting things ready and making sure that the right person got in there, and then you had a 30 year tenant, like how great would that be.

So I think that there’s a I mean like with most things, right, you do the work and put in the work and the reward comes with it. But I just think that people they get super worried about oh, it’s another month. I know Nana, we talk about Nana a lot, but Nana just hates to see it go one more month without a renter in it, and so she gets kind of blinded by. If you just spent one more month doing a few extra things, then you might get the right person in there for a long time. And really I mean this whole thing’s about profitability, right.

Chris: Absolutely, and every time you have a vacancy it just eats into your profitability, no question about it. But I’d rather plan for a vacancy that you know I miss two months every three years as my worst case than you know take shortcuts and try to save some money today and never have a tenant finish out the lease or not take care of the property. The other thing that’s, you know, a little bit aggravating. You know we have a lot of owners that do their own turns right. They, you know, either they do it themselves or they have their own people that go in and get properties ready between tenants and sometimes, you know, most of the time it works out great. You know their standards are our standards. It’s wonderful.

Other times we have to go in, especially if it’s an out-of-state owner, and then we’ve got to do our inspection and we find that, you know, any screens aren’t in. You know, whatever it is, every owner, every management company should have a checklist of how things have to be before not just a tenant moves in, but before it’s shown. And that goes back to our minimum standards document where you know we have a document that says this is what we expect from our owners. These are the standards that we require for our properties, the absolute minimum. We’ll put that in the show notes too, and when we get pushback from an owner that wants us to show a property that is for lack of a better term a shoddy refresh, we risk advertising a property that’s not rent ready or is poorly presented. You’re going to attract people who are, I don’t want to say, desperate. But if you’ve got two properties and they’re both a thousand dollars a month and one is a shoddy refresh and one is, you know, to standard and ready for, you know, potentially section eight or what have you, obviously the one that’s in great shape for the same price, or better shape for the same price, is going to go faster, and the one that ends up with the shoddy refresh is probably going to be, you know, a candidate that maybe isn’t your first choice to screen in right, and I think the message there is.

Then again, this gets a little bit fuzzy and it’s all philosophical, I guess, but you know, if they don’t think that we, as the property management company, don’t care what a property looks like when we show it, or if an owner doesn’t care what the property looks like when they show it, I can tell you flat out they won’t care either, and I think we’ve seen that happen over and over.

The other thing again I think that gets people in trouble, of course is you know people get scared, they get desperate and a couple of things happen that you know sort of cost rehab and maintenance money and aggravation downstream, but charging too much for the property. If your rent is above you know what the market rate is, you’re going to attract people who are desperate to get a roof over their heads and may only have the first month’s rent and the deposit. And the other thing that happens is if the property is not ready and you know you still have to get X, then some people tend to start relaxing their screening criteria and all of those things may ease a little bit of pain once in a while today, but almost all of those things come back and cost you time, money and aggravation, maybe even before the end of the lease that they signed. So this is just gloom and doom today, isn’t it? I don’t mean it, but again-.

Laci: I keep trying to bring you guys to the light over here. Don’t take the bait.

Chris: 30 year tenant and I want our listeners to you know when they’re interviewing a property management company or having a conversation with their management company. I want them to ask these hard questions. You know how do you make sure that before you advertise a property, it’s in good shape, right? What are your screening criteria? What expectations do you have for your tenant when it comes to rehab and maintenance? You know what is a tenant going to get charged for versus what an owner is going to be charged for, right? You know if, if an owner you know backs up the toilet with a load of Legos, you know they’re going to get charged for that. Right up the toilet with a load of Legos, you know they’re going to get charged for that. Right and rightly so. So if they break the window, they’re going to get charged. There’s other things that happen that you know. It’s absolutely appropriate that the owner pay, but knowing what those standards are, being clear on them, having been through it before, that’s something that you want to be looking for.

And all of this, I think, comes back to the whole idea of does that property manager understand the concept of the neighborhood standard, right? We’ve had, you know, a couple of podcasts about the neighborhood standard, and that simply means that does the property? Is it at or above potentially, but is it at the standard of the neighborhood? And again it goes back to we don’t want to see owners over-improve properties above and beyond what’s the standard for the neighborhood. But we certainly don’t want them to ignore properties to the point where they fall behind the standard of the neighborhood and that comes back to rent If the standard in that neighborhood is X and for whatever reason the owner needs. You know X plus Y, that is generally. You know that’s hard, it may not happen. You know. By the same token, you know it’s a little bit better if the standard is X and your property is not quite there. So you’re reducing the rent a little bit. You know there is a place for that, that’s for sure.

You still have to do some screening. You still have to do some screening. You still have to have some conversations, you still have to do your homework with those potential applicants. But everything comes down to that whole idea of the neighborhood standard. You don’t over-improve because you’re not going to get the rent back and you can’t under-maintain a property because either it’s going to hit you by making it harder to rent and if it doesn’t hit you there, it’s going to hit you at the end of the lease. So I wanted to talk about questions to ask in this interview process about what their rehab and maintenance department looks like. And it’s really hard for I know, it’s hard for me, I’m sure, gretchen, to talk about this without using our own know, our own company as an example. So, gretchen, why don’t you tell us when do we use a W-2 employee versus, you know, hiring an outside 1099 contractor?

Gretchen: So, when it comes to the routine maintenance, as soon as we get a meld or a work order, we’ll send our maintenance crew out to try to take care of the situation. And if they arrive and they find that it’s, you know, a main drain backup, that’s not something we have the equipment for. So then we’ll send out a 1099 contractor or a plumbing company to take care of something like that. Normally we try to take care of it in-house because we know the guy’s schedule, so we can actually tell them when it’s going to happen and tell the owners when it’s going to happen, instead of relying on a 1099 or outside contractor or company. Same with the turns A lot of times, you know we’re waiting on a contractor to say, yeah, you’re on the schedule for this day. But if we can use our W-2 employees, we know exactly when they’re going to be there and we control that schedule to stay on time, stay on track.

Chris: Yeah, and we use W-2 employees in occupied units almost exclusively unless, like you said, there’s something that is beyond their capability. And there’s a lot of reasons for that. One they’re employees, so they are expected to go where we want them to go, when we tell them to go. So you know, there’s some control, and some not just on our part, but there’s some control on the tenant’s part when they have a better idea of when they can expect somebody. It’s also better for you know liability coverage. It’s better for you know the owners, the tenants, and for our insurance situation as well.

The other thing that I think is worth asking is work trucks versus mileage reimbursement for the 1099 employees. So we’ve gone round and round about this. We went years and years without ever providing any trucks and then in Columbus about three years ago, we decided that we needed to have some work trucks in the fleet, so to speak, because we were above and beyond whatever their hourly wage is. But there’s still a management function that has to happen with that employee, with that two person, in that they have to make sure that money actually gets set aside to make their truck payment to you know, fix their truck to keep gas in it and so forth. So you know, we’re fortunate right now that we’ve got, you know, three trucks, three great guys, you know, with great driving histories and so forth, that drive those trucks. It’s also great marketing and it also makes the tenants feel better when somebody rolls up and they see it’s a roost truck.

But lately, thank goodness, you know, we’ve got the other four guys. I think we’re up to seven folks now right. Seven maintenance people now right. So we’ve got four of our guys that are providing their own transportation and so we pay them mileage as well, as, you know, trip time, and that all gets built into the cost, and that’s also one of the reasons why the average cost of a metal has gone up so much in the last five years. So it’s important to ask, you know, your property manager, how do you handle rehab and maintenance? Do you have employees? Are you farming everything out? You know, do your costs include, you know, all these other things and at the end of the day, are those costs reasonable?

Laci: You know, one place to look and I’ve noticed this since you guys started doing Google reviews is how, like people will absolutely go and talk about a bad experience right On a Google review. They’ll vent to anybody who will listen. But I see every day reviews come through for your maintenance team specifically about how timely they were, about how knowledgeable they were, about how well they did, about how well they communicated. If the problem couldn’t be fixed that day, then they communicated what the follow-up plan would be and when someone else would be there.

Because I think that when you get outside of those W-2 employees and you have to rely on an outside source be it a 1099 or an extra comp, another comp then, like you said, you’re not in control of that timeline. You’re on their timeline. So communication with the tenant about what that’s going to look like can really kind of ease some anxiety and prevent some bad reviews. I think and it seems like your team does a really great job of doing that and I think that again attests to the fact that you guys have these expectations set, that you communicate them with your W-2 employees and that you have the processes in place which you know. If Nana could get just one maintenance person. Bless her heart, that’s her number one struggle is she can’t find anybody to do the work consistently and in a timely fashion. But she’s relying completely on you know, outside contractors and people who own their own businesses. So I think you’ve kind of nailed something there with these W-2 employees.

Chris: Well, and there’s a handful of things that have, you know, gone into getting us to this point where you know, maintenance is a plus for the company, right, I mean? And the Google reviews, you know, taking an interest, getting everybody involved, right, I mean. And the Google reviews, you know, taking an interest, getting everybody involved, hiring people who understand the importance of doing that kind of excellent work and asking for the review. That’s all you know, absolutely critical. But you know, we used to, back in 2017, 2018, I think, the highest paid you know maintenance person we had I don’t know if we were hitting $25 an hour and we certainly didn’t provide trucks back then, you know, I think it was closer to, you know, probably 18 to 22,. Maybe 20 was the average. And we’ve got maintenance guys today that you know are making $35 an hour and it took me a long time to get comfortable with that. But because we’ve gotten very good at hiring and screening for employees, like we’ve gotten good at hiring and screening for tenants, you know these guys are first class. You know I’d stack them up against any group of maintenance people you know in all of Ohio, quite frankly. But there is a cost to that and to pay less and get a lesser employee. It just absolutely isn’t worth it. So you know that’s part of what’s driving up the cost of a MELD.

But the other things that have made a huge difference in those reviews is the fact that the property MELD itself, the software that we use, that interfaces with AppFolio. You know it’s a great communication tool. It’s a great scheduling tool. You know the owners can see the MELDs that come in, the work orders that come in. They can control how much they see when they see it. It helps control costs. It definitely controls the schedule. So that’s the second thing that’s made a massive difference.

And the third thing that’s made a massive difference, excuse me, are Heather and Jade. You know Heather’s our rehab and maintenance manager whatever you want to call her goddess and she’s in charge of all things rehab and maintenance and she’s responsible for the turns and wrangling 1099 contractors on turns. And Jade, she basically is the conductor for MELD, right? So she manages all the work orders that come in via Property MELD, she dispatches them. She’s got a fantastic relationship with those seven guys and between getting the right guys and just sucking it up and paying what the market requires getting the right software in place, and this software isn’t cheap.

We’re sitting at about roughly a thousand units and property mode costs us about $2,500 a month, every single month. But it’s indispensable. We can’t take care of our owners or our tenants without it. And then getting some great leadership in place to help Gretchen those are the things that have really helped us turn the corner on those Google reviews. The other thing I think about too, you know, managing costs. You know we have one gentleman, Paul Dixon, who is just one of those unicorns that is an expert at HVAC, is an expert at electricity, he’s an expert at plumbing. He’s just terrific. And you know he’s been working with us for gosh Gretchen what at least three, four years now, maybe.

Gretchen: Oh, at least yeah. Well, probably four or five yeah.

Chris: Yeah, and he’s an outside contractor, he’s a 1099 guy, but he knows that he can count on us for steady stream of work. He knows he can count on us to to, you know, get him paid, you know, quickly and that and again, this whole business always comes back to relationships. But having that kind of 1099 contractor relationship where Gretchen and Heather, you know, basically treat him as if he was an internal employee, you know, that makes all the difference in the world and you’ve had great history Like, I think, is it Rick? Is it Rick Lucas?

Gretchen: Yeah, Rick and Steve, yeah.

Chris: Yeah, so they’ve been doing turns, you know, for owners on our behalf for a long time. So, again, what works for us is we want to do the maintenance and occupied units with W-2 contractors and we do the majority of our between tenant turns with outside contractors. But we’re also working on building up our own turn team to do some of the less involved turns that just require, you know, paint and cleanup, because we can get it done quicker at this point and more cost effectively. The other thing that is making a huge difference is, you know we used to run through maintenance guys like crazy. We just couldn’t keep them. And now you know you’ve got Don and Paul out there. That, my gosh. I mean they’ve been with you for what? Two, three years now.

Gretchen: Oh, I think five.

Chris: Yeah, I mean, those two guys alone have been with us for a long time and you get that sort of institutional wisdom. You get that experience and they know how to talk to and work with the tenants. But then they also understand too that this is a situation where, yes, we’re writing them a check from Roost, but their time and work is getting reimbursed by the owner. So it takes a special person to excel at that and it’s definitely something that you want to find out. You know how your property management company or your property manager feels they’re doing in that whole rehab and maintenance department. I feel like I’m going on and on about this, but we’ve been through the ringer and back again, so I think you’re hitting.

Laci: I just think you’re hitting on so many pain points and this is so valuable, I think, for people, you know, for people with a lot of properties. I think they’ve had to kind of institutionalize a little bit, right, if, even if they’re doing it themselves, they have to put some processes in place, how else would they manage? But there are people out there who are trying to decide constantly probably happened for 10 years or as long as they’ve owned a property should I do, should I work with a property manager? Should I do it myself? Right, and again, I think you’re just pointing out all of the complexities of this and kind of making clear how the investment that you can make in a property manager pays off, especially if you want to, you know, automate your rent collection and get on with your life.

I don’t know where I heard that killer phrase, but you know. I just think that it makes it really clear when you sit down and you have the discussion all at one time or in this case, in 12 parts, all at one time, in 12 parts. It really like lays it out there, because if you’re deep in it day to day, managing your own properties or dealing with a property management company who’s not doing a good job, then this really makes it clear how having a property management team to work with that does do a good job could just be a game changer, yeah.

Chris: The other thing to ask about are there plans and processes for handling after hour emergencies? We have a 24 hour answering service where if somebody, if a house, I don’t know pipes freeze or something catches fire God forbid in the middle of the night, what is their procedure? To get outside of property, meld and, you know, get help to these tenants. So ask them about that as well. I believe we still have the guys rotate between holding the phone, so to speak, on nights and weekends and that’s, you know, overall has worked out pretty well and thankfully we haven’t had a whole lot of after hours emergency lately. But it’s a great question to ask your property manager, potential property manager.

The other thing that comes up a lot is what is your property manager’s policy on expecting owners to maintain reserves for maintenance and rehab costs? You know some of our larger owners. They may take a draw but they leave a substantial amount of money in the trust account so to cover things that just happened. Right, and our property management agreement says that we can spend up to six hundred dollars in the event of an emergency without you know getting permission, event of an emergency without you know getting permission. But if you’ve got somebody you know for with 100 properties or 50 properties, you know they could have far more emergencies than somebody else. So what is their policy for asking you for maintaining reserves to cover maintenance and rehab costs, and how do they feel about the whole idea of, you know, financial stewardship? I will tell you that we are pretty clear about what we charge owners for, reimbursing W-2 payroll, and I have to say it’s not enough based on everything that goes in there, whether it’s insurance or trucks or workers’ comp or vacations, holidays and so forth. But there also has to be enough slush in there for stupid mistakes. And as good as our guys are, there are still times when things happen that we just flat out, in good conscience, cannot and will not pass along to the owner. So I think the phrase that we use is suppressing. Sometimes we end up suppressing those charges or just flat out reimbursing those charges if they happen to get past us in a folio, because you know, the last thing we want to. We don’t want our tenants to suffer because of tenants suffer, owners suffer, right. But we certainly don’t want our owners to suffer because you know we did something stupid or not stupid. I mean, our guys aren’t intentionally do anything stupid, but sometimes we make mistakes.

Sometimes you go out to a property, it doesn’t get fixed the first time. You know, maybe we wait too long before we hire, you know, an HVAC contractor to come out. In any case, what is their position on quote financial stewardship? How are they taking care of you? And again, you know, what is their software platform? If they’re more of a boutique shop, how do they handle the orders? How do they of the month, every single month, which means that there’s less money available in case of emergency for the remainder of the month, until the rent comes back faster.

So there are times, you know, if something happens say it’s more than $1,000 or it’s definitely more than what next month’s rent’s going to be that we do have to go to the owner and say, hey, look, this happened, this is what it’s going to cost. We’re going to need you to go to your portal, get out your credit card and upload some funds so we can get this taken care of on your behalf, just like on a turn. You know we have to have our owners. If there’s a turn that costs $5,000, then you know they’re going to have to upload funds to take care of that.

Now, on the other hand, you know, when we have some owners that have, you know, quite a few properties, and especially if we’ve been working with them for a long time and something comes up, you know we will quote front money on behalf of that owner, you know, from our pocket.

But we know that it’s OK because when the rent comes in next month there’s going to be more than enough to get us paid back, so to speak. So in that respect we are, you know, generally I don’t want to say happy, but we are capable and fortunate to be able to, you know, help the owner out without having to aggravate them by, you know, asking them for cash. You know, after they get paid out, we can generally absorb a whole bunch of that and get ourselves reimbursed when the rent comes in next month, before the first check run. So again, maybe that’s not as big a deal if you just have one property, but if you have more than one property, the ability and the willingness of your property manager to partner with you like that, I think, is pretty valuable, fair enough.

Gretchen: Fair enough.

Chris: I’m droning on and on, I’m putting Gretchen to sleep. So a little bit about our history. You know there was a time when I didn’t want to do any rehabs. I thought it was above and beyond what we were capable of doing. I didn’t want to be a construction management company and you know we sort of shut that down a few years ago. And now it’s a point of differentiation for us. And now, like you said, it’s at the point where you know we’ve got this built to where we’re actually getting five-star reviews for our maintenance guys and you know we’ve come a long way. So that may be a too perfect world for some of the folks that you’re talking to about managing your properties, but it’s still worth asking the questions and getting those thoughts and expectations out there. And we talked about how we’re structured and how lucky we are to have Heather Jade and then now Paul out there doing taking pictures and doing that Site Audit Pro app to figure out, help Heather figure out what kind of bids she needs to get and then get the okay from the owner to get those rehabs done. So that’s kind of where we are.

I think that sort of gives everybody some talking points for what to expect from your property manager and questions to ask if you’re interviewing a property manager. But I think it all comes down to the ability of a property management company to effectively control rehab and maintenance. It’s just the cornerstone of keeping a successful investment. You know you still got to keep in mind the neighborhood standard. You’ve got to make sure that they have a maintenance department or, if it’s outsourced, that they have a system in place to take care of the tenants and take care of you, the owner. You know how do they treat their folks. You know, do they provide trucks? How do they make sure that their maintenance guys can actually get to a problem when a problem arises? How do they handle your money? You know what kind of tools do they use. I think these are all things that that you at least want to bring up or at least investigate as you move forward.

So I guess this is something that we haven’t done before, gretchen and Laci, but before we wrap, I do want to invite any of our listeners that happen to be in our market areas, basically anywhere from Columbus to Springfield and on the space coast of Florida. Please check us out. I am super duper proud of where we’ve come from, especially with the rehab and maintenance team and the whole team all together, and we are ready to start expanding the number of owners that we work with, and you know we have the capacity now to bring on some more great owners and bring on some more doors. So please never feel that, if you’re listening to this, that we don’t want to talk to you as well and feel free to ask us these questions’t want to talk to you as well and feel free to ask us these questions. We’ll answer just like we did today.

So if you’d like to get a free quote for property management or a quick consultation with Gretchen, you know you can check out our website at Invest With Roost, or you can literally go to a website we have called pmservicesquote.com, and we’ll put that in the show notes as well. So this is the hardest sell I guess I’ve ever made at the end of a podcast. Laci, hopefully you’ll forgive me, but I’m pretty proud of you.

And I think it’s time we kind of get it out there. So the next time when we get together for part five, the title of our next episode coming up is Will they Rent your Property for Top Dollar Fast? So that’s what we have to look forward to next Anything else Can’t wait.

Gretchen: Nothing else for me.

Chris: All right, Laci, always a pleasure.

Laci: Absolutely. We’ll see you next time.

Chris: All right, ladies. Thank you Bye.