Property management

[villanelle75]

If we end up moving to Italy, we will be rentingout our place. Our realtor, who we have a great relationship with, has volunteered to kind of manage the place for free, soemthing he does for several other clients. He would deposit the rent checks and be the guy who tracks down a plumber.

While this seems like a great deal, I feel like we might still need to go with a mangement frim. We will be very far away and therfore unable to deal with anything that may come up. We could be actively involved in finding a tenant, though right now, we wouldn't know where to begin, other than finding a landlord association. But if the tenant moves out (which is quite possible consididering we will eb gone 2-3 years), we won't be around to handle the move out, inspection, etc. or to market the place and deal with the technicalities of getting a new tenant in.

For those of you who do or have done property rentals, do you think we need one in our scenario? Also, what is a typical fee? A quick online search found 2 places that listed their fees, and both said 10%. Is that fairly standard? Do most places have any non-full service options, where they charge a fee to deal with finding a tenent and/or moving out, but then don't take care of the day to day things so that the fees are less?

TIA!

*I did a search and while I found some landlord threads, none of them answered these questions.

[thedoorchick]

From that far away, you'll absolutely have to have a property manager. Lots of things can and will happen at the property in 2-3 years and somebody will need to be nearby to take care of them.

From what I hear, 10% is fairly standard. Honestly, I don't see any way you could have anyone do any kind of "limited" management service, whether people willing to do that actually exist or not. I can't really think of many aspects to property management at all that can be done long-distance, especially if you are on another continent. In that span of time, I don't think it's "possible" you will have some turnover of tenants, I'd say it's a near-certainty. So you're talking advertising, finding and screening tenants, collecting rent, handling maintenance issues, getting people moved out and the place fixed up for the next person, the whole lifespan of a tenant. Plus, some people don't go quietly. ;) Murphy's Law being what it is, you could also have an eviction to deal with.

So I would advise hiring a management company, and maybe check with your local landlord association for referrals.

[villanelle75]

Thanks for the input. I just hate to lose 10%, especially when we have someone willing and able to collect the rent and handle maintenance. Since we are hoping to rent to a military family, I'm less concerned about the major issues. If anything happens, we can call the command of the renters and get them in serious trouble, so that tends to prevent a lot of the common renter issues. Plus, we know they have a steady paycheck and are very unlikely to lose their job. And they are likely to stay longer than the average tenant, since most families seem to find a place and stay for the duration of their orders.

Another question: would a property management firm help us determine what a reasonable rent would be? Our next door neighbors rent, and their place is even the same floor plan as ours, so I'm trying to come up with a tactful way to ask them what they pay, which is a good place to start, though our place is nicer and has an extra bedroom added. And I can certainly check ads and call on any for rent signs in the area, but obviously, i want to get as much money as possible but not go too high so that we can't find anyone.

Ultimately, I guess I have to suck it up and pay someone 10%, which means that unless we can get more for the place than my (somewhat uneducated right now) guess, we are going to lose a good amount of money every month on this deal. Ick.

[thedoorchick]

I guess I'm not sure what the difference is in the service you expect if you hire a management company vs. your realtor doing it for free as a favor. If the realtor will be doing everything a management company would, then maybe there's no downside to going that way.

Check local newspaper ads and Craigslist to get an idea of area rentals. I don't know if a management company would help you set the market rent or not, since I've never used one, but it seems a reasonable expectation since you would think they would know the market well. And I would go ahead and ask the neighbors, personally - it might be a little less than perfect manners to ask someone their rent, but I think you have a legitimate reason for asking; it's not like you're just nosy.

[MLA]

You definitely want the property manager. That 10% is worth every penny, IMO. We used to have a cheapy property manager for our house in Fla, but we got cheapy service. Now we use a full-price property manager and couldn't be happier with the way they manage our place. That said, our full-price manager is only 8%, so you may not be doomed to pay 10%.

In terms of setting the rent, your property management company should be able to help you do that. They'll know what the market rate is.

The problem I see with using the realtor is that he's not going to be able to get the place rented as easily as a property manager will be.

[villanelle75]

Our Realtor wouldn't help with finding a tenant, move-in and move-out inspection, etc. He would just manage the tenant once they are in (i.e. rent and repairs). If I were an experienced landlord, I'd probably feel okay finding a tenant and getting them set up, finding a legal contract to use, etc., but for our first go around, I'd sure like some help, since the tenant search and move in and out are the most complicated parts. I guess I want the help, I just don't want to pay 10% for it! Sounds like I'll need to suck it up though.

As soon as we know for sure we are moving, I figure I can get away with asking the neighbors. The mom loves to gab on incessantly, so it shouldn't be to hard to engage her in a convo about moving and renting, and segue from there into a question about their rent.

[villanelle75]

MLA, what were the differences in service between the cheapy service and the good service? I am a but premature in all this, but I'm trying to figure out what questions to ask, what services to look for, etc., if and when it comes time to compare companies. If I know what sucked about your lousy place, I know what to look out for.

[MLA]

MLA, what were the differences in service between the cheapy service and the good service? I am a but premature in all this, but I'm trying to figure out what questions to ask, what services to look for, etc., if and when it comes time to compare companies. If I know what sucked about your lousy place, I know what to look out for.

Basically, they let the place go to shit. They didn't do regular inspections (I mean either quarterly or bi-annually), so the house ended up in disrepair. They were also very difficult to get hold of, and they took forever to get the place rented.

[Oakley]

How well do you know your realtor that is willing to do that for you? Would they do it for free? Or, do you have any family in the area that could help you out?

We rent a place 1500 miles away and do not use a property management company (I didn't want to lose the 10% either!) but I have a lot of family in the area that could (and have) help me if we needed it.