Anaheim Property Management Blog

Free Property Management? How is that?

I understand that many investment property owners do not currently pay for management services because they manage their own properties.  It is estimated that over 70% of all investment property owners are SMIPOs (Self-Managing Investment Property Owners).  They are reluctant to hire a professional property management company, even if they are tired of managing their own property, because, well, it is free for them. But why do most of us pay $10 to $15 to have our cars washed?  I suspect we believe they can do it better, and it is not worth an hour of our time in the hot sun to wash it ourselves.  I understand $15 for a car wash is far less than $100 a month to have someone manage your property; but what if it were not? In commercial leasing, it is common for the tenant to have two options when leasing: 1) a gross monthly lease, where all of the expenses are included in the rent or 2) a triple net lease, where the tenant base a base rent and then a monthly fee for the expenses of the center. We now offer this for our clients.  Rather than having you pay the management fee, we charge the tenant for our services.  It is common for the rents of SMIPOs to be below market.  When they hire us, we agree on the rent the owner wants (say $1,900).  We then negotiate with the tenant, charge them $1,900 for base rent and $100 for our services for a total of $2,000.  We forward the $1,900 to the owner and keep the $100 to manage the property.  If future rents increase, our fee stays the same, and the owner receives the increase. Free property management to our owners.  If it were any less, we would have to pay you to manage your property.
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