| A property maintenance company is by definition | | | | to lie to you and claim that an AC condenser has |
| an overpriced third party vendor. Why are they | | | | to be replaced when all it really needs is a $20 |
| overpriced? Because this company has to support: | | | | part and 2 hours of labor. Or they might say the |
| 1) Massive Overhead - which consists of office | | | | electrical box is too small and must be replaced |
| rent, company trucks, accounting person, | | | | for a charge of $3000 when there is room to add |
| receptionist, the list goes on and on | | | | a couple more breakers for a minimal cost. If |
| 2) Management Salaries - it is likely at least one | | | | business is slow, these guys have to make a |
| manager has been hired to supervise the | | | | certain amount of money or they go broke. |
| maintenance staff. | | | | Successful real estate investors will seek and find |
| 3) Owner's Profit - if the company is a decent | | | | a one to two person vendor. In other words, we |
| size, you can rest assured the owner is not out | | | | look for a plumber without an office, a fancy |
| there doing any of the maintenance work. | | | | truck or staff (except for a helper and possibly a |
| 4) Advertising - they need a lot of business to | | | | spouse) that is licensed, insured and has over 20 |
| support the costs above so you are also paying | | | | years of experience. These vendors are great at |
| for overpriced yellow page ads, direct mail pieces, | | | | their trade. However, they are usually not very |
| and perhaps a full-time marketing person. | | | | good with advertising or budgeting money. |
| As an experienced real estate investor with a | | | | This unique type of vendor needs steady work. |
| great deal of rentals and having bought and sold | | | | They could make more money doing maintenance |
| over 150 rental properties in the last 8 years, I | | | | work for home owners, but since they only work |
| have never met a single successful real estate | | | | by word of mouth, this is a feast or famine |
| investor who hired a property maintenance | | | | segment of his business. If they can get |
| company. In fact, I have never even heard of a | | | | connected with a large landlord or a Tampa |
| successful investor hiring one of these companies. | | | | property management company, they no longer |
| Why? Property maintenance companies are | | | | have to stress about getting enough work to pay |
| extremely over-priced. When hiring a Property | | | | the bills every month. |
| Maintenance Company you can expect to pay | | | | By hiring a much smaller company-preferably a |
| $80 -$120 per hour to perform carpentry, | | | | one or two person company-you will receive |
| plumbing, or electrical work. You can also expect a | | | | volume discounts. We normally pay 50-90% less |
| mark up on materials of about 300%. We | | | | than landlords who hire those large companies. |
| generally find the technicians are much more likely | | | | Our vendors are much more loyal and responsive. |