A.D. Cantelmo Property Management
Our Business is Property Management in Orange County California
Why your Property Management Company ignores you
You would think that since you hired a company to look out
for your investment property that they would treat you with respect and answer
your calls, but to your surprise they not only treat you with disrespect, they
actually ignore you all together. The question is why?
The answer is simple, most Property Management companies
only care about you before you sign the contract and they understand that for
you to switch companies is a great burden, so more often than not, many clients
of these companies will put up with the abuse for long periods of time before
they move on. In my next blog I deal with Leaving your Property Management Company.
The large property management companies have many ways to
attract new clients and they work very hard to bring in more and more business
because their business model is not to satisfy the clients they have, but to
continue to grow the number of clients. They understand that they will lose a
good percentage of their clients due to lack of attention but they make up for
it with new contracts.
The question you may ask is, if they work so hard to get
clients, why not try harder to keep them and that is a great question. The
answer is not so great. As a management company grows the amount of work also
grows and in order to do a satisfactory job on each property and the number of
clients grow, the number of employees also should grow and that is the problem.
Most companies work on a very low profit margin and if they hire more employees
that makes the margin even less.
Let’s look at an example:
If you pay your management company $100 per month, you expect
them to collect the rent and send you a statement at the end of each month, you
also expect them to visit the property on occasion and take care of any repairs
that are needed. When the property is vacant, you expect them to fill the
property. These are all reasonable expectations a property owner should have.
The question is how much can a company do for $100 per month and still survive.
The answer is twofold. First they can grow the business and bring in more $100
per month clients, but that goes back to the employee question and how many
they need to do a satisfactory job. The next thing they can do is fill vacant
properties and make the commission and that is the most efficient way for a
company to increase the profit margin. The more new clients they bring in, the
more vacancies they can fill. Is it starting to make sense yet?
The easiest way for a Property Management Company to make
money is not to keep their current clients happy, but to bring in new clients
that they have to fill a vacancy. As investment property owners know, when a
management company fills a vacancy, a commission is paid and at least some of
that commission and many times all of that commission go to the management
company. The commission can surpass the amount that a company can make on a year’s
worth of management fees. You can see why, bringing in new client’s increases
the chances of filling vacant properties.
Finding a company that will continue to give you great service is one of the biggest problem that
investment property owners face and solving that problem is not always easy. You can read more about what you should expect from your management company. What you should expect from your Property Management Company.
A.D. Cantelmo Property
Management Specializes in Property Management in Orange County