In the second week of our Multifamily Owner Expenses series we are addressing: Property Management.
Property management has been a hot topic with many multifamily owners in recent weeks. Vacancy rates are rising, rents have tempered, and expenses have been increasing. This is causing many owners to sharpen their pencils and examine efficiencies and inefficiencies within their properties. The number one place that owners are analyzing is their property management representation, what they are actually being charged, and if the services and support they are receiving are commensurate with that fee.
The common rates we see by property management companies is 5.25%-9%. However, what owners are actually being charged for property management is found in the costs outside of the standard percentage fee.
Common areas we see owners being overcharged:
- Unit Turns
- Landscaping/Snow Removal
Questions to ask yourself:
- Is filling my units a priority to my property manager? Despite rising vacancy rates, if a property is 10-15% vacant, you might need to consider a change.
- Are you being charged for work completed in a timely fashion? Or are you receiving invoices 4-6 months after work is completed?
- Are 14 Day Pay or Vacate notices being posted for late payment in a timely manner? We came across one owner who had a tenant 6 months behind on rent and the tenant had yet to receive a notice to pay or vacate the property. This oversight will potentially cost this owner 12 months of income.
- Are notices being posted for lease violations in a timely manner?
- How is the curb appeal of your property? This is the biggest factor that can invite or deter tenants. If potential tenants drive by and see garbage or furniture on the property, it will likely send them on their way to find something else.
If you find yourself dealing with any of the above issues with your current Property Management company, or have any questions, please reach out to SVN Cornerstone’s Property Management division. We offer comprehensive Multifamily Property Management, and our Senior Property Manager, Tami Dolson, works diligently to ensure all our properties are running at the highest standards
Please reach out if you would like to discuss your Property Management needs!
SVN Cornerstone Multifamily Team
Nate Gant is an Advisor with SVN Cornerstone. Nate has been an active member of the Eastern Washington real estate community since 2010. He has brokered more than $100 Million in real estate transactions, specializing in land development, REO and investment properties. To get in touch with Nate, email nate.gant@svn.com or call 509.993.4440.
Jordan Lester is an Associate Advisor with SVN Cornerstone. Jordan served as a brokers assistant for 3 years with SVN Cornerstone before becoming a full time broker. Jordan specializes in the multifamily sector of commercial real estate. To get in touch with Jordan, email jordan.lester@svn.com or call 509.496.6922