What do you do if your property manager overcharges for repairs

Common issues when working with property managers are the fees associated with repairs, a replacement might be better than a fix. What do you do if your property manager makes a decision that costs you more money? In this episode, both Michael and Emil share recent stories where this happened to them and what they did to address the situation.   --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Emil: Hey, everyone, welcome back for another episode of the Remote Real Estate Investor. My name is Emil Shour and today I'm joined by…   Michael: Michael Albaum.   Emil: And on this episode, Michael and I are going to be talking about something that's very common to new and seasoned investors, which is, what do you do when you get a charge on your property management statement that looks a little too high? What are the steps you should take? How should you handle it with your property manager to make sure you're not getting ripped off? So let's hop into this episode.   Alright, Michael, you've been at this for a while and I feel like this by still happens to you, right? You see some charges on your property management statement and you're like, hmm, this seems a little more than either I'm used to or that I know this should cost, so I'm curious. What do you do, when you see one of those charges? How do you handle it?   Michael: Yeah, so I see it. Not all the time, thankfully, because if I did, I might be with the wrong property manager. But I've seen it enough times to get frustrated by it and so it's as simple as sending an email with a copy of the invoice that I'm questioning or that I have an issue with, or picking up the phone or having a phone call with the property management saying, hey, this seems too high, this seems excessive, you know, whatever, whatever the words are that you're feeling, send that to the property manager and see what they say. I had an instance where I sent that to a property manager and I said, hey, these plumbing charges seem really high. What's going on? They said, oh, it was an emergency call. There was someone else that could do it, this that the other thing. So it was in this instance justified.   But that was all details that I don't have looking at the at the portal, right. So it's all kind of supporting evidence, supporting details that you get from the property manager, because they are there physically, locally doing the stuff and so I think it's important not to get all up in arms and not to get accusatory, but just say, hey, this doesn't look quite right to me wanted to get find out a little bit more about it, then you can take it to the next level. Just recently, I had a property manager get a quote for to replace a furnace. It was like 3800 bucks to replace it and I was like, whoa, that seems really high. Can you please go get another quote and I had them get a quote from a company that's doing a bunch of work for me up the road, and they were like, we're too busy to quote it. But at that price seems totally reasonable and like, sweet, thanks for doing that. It seemed high to me, but that's just kind of the going rate in the area, we found a cheaper rate from another, another vendor, but they're known for not doing the best work. So it's like, you know, in this instance, yeah, the cost is high, it sucks. But that's just what it costs and especially now because things just goods and services tend to cost a little bit more prior to doing business. So again, find out the details, find out what's going on, and then have a conversation around it. But I mean Emil, I think you ran into an instance where you had a kind of similar set of circumstances right and you had a little bit of a different outcome.   Emil: Yeah, so the idea for this episode came I had I just was reviewing my property management statement for a single family home I own in St. Louis and I saw about you know 650- $700 of charges to fix the like the what is it called? The highlight on the water heater, right and, or like the valve whatever I don't know these things whatever the thing that heats up the water heater…   So you know I get it back at 650-700 bucks with maintenance and parts and everything and I'm like, huh I'm pretty sure a brand new water heater is like I went and I looked online how much is a new water heater? It ranges from like $1,200 on the low end to like 2000,so like let's call it $1,500 without labor and stuff but half the cost of getting a new one and so I you know grab the invoice like you'd mentioned I wrote a nice email like you mentioned which is good don't write like hey, what in the world is this? This is crazy I want my money but like approach it from I approach it from a point of like, does this you know seem right to you like came out to $700 I think a brand new one is 1500 bucks. Like I wish you guys had communicated to me we could have maybe made a like a go no go on getting something brand new at that point. Why replace why fix something that's potentially old for half the price when we can just get a new one for potentially twice the price and so their person reviewed it with the Super two to the maintenance person, excuse me to see, like what happened and they're like, sorry, it ended up being something more complicated than we thought and they were nice enough to credit it back. Because I think they realized, like, yeah, that is a lot for repairing something that shouldn't have been that way, because they've maybe misdiagnosed it on the first couple rounds and, you know, also said, like, yeah, we'll communicate with you more in the future on like, things that are a little bit more expensive, so we can make a decision with you. So boom, right, nice, easy. One email wasn't like accusatory just trying to tell them where I was coming from putting numbers to it, right? Like, this is what this came out to a brand new one is this, like, what do you guys think and so, you know, they were cool enough to credit me. So that's kind of where I yeah…   Michael: I think that's an amazing outcome, I would never expect a property manager to do that. So kudos to whoever you're using, because that I think kind of goes above and beyond and I think something that we all have to kind of reckon with is, I think your example is probably the best case scenario. Oftentimes, like I've had those instances where those conversations, they said, yeah, that's like, this is who we use, I'm like, Well, don't use them anymore. They're too overpriced. They're too expensive. Like, please go find a different vendor and of course, I'm one of many owners that a property manager deals with and so, you know, my word only goes so far, my opinion only goes so far. But if enough people are voiced their opinion of, hey, this service is just too costly. Please try to go find a different service provider that can that can be impactful and so oftentimes that charge that invoice that you're questioning or combating is the wrong word, challenging, rather disputing, yeah, might, there might be no resolution from it, but you might be able to implement change going forward and so I think that is often kind of the best case scenario of, hey, this service provider might be a little bit on the high end, going forward, they maybe are using a different one, because you said something.   Emil: Right! This is the first time I've ever had a property. I've sent out emails just like this plenty of times, this was hands down the best results I've ever had. Newer property manager I'm working with, I brought like, all of my units in St. Louis to them. So you know, hopefully, that's, that's why they're being cool with me. Yeah, a lot of times, a lot of times, it's also like expectation setting, right? Like in the future, there'll be like, oh, we have your threshold that this dollar amount should we can't do you want us to contact you when it's at this amount. So I think it's also like, maybe you don't get a credit back. Most cases, you will get a credit back, but at least kind of sets expectations. Yeah…   Michael: I think it's safe to say it's talking about setting expectations. Don't expect to get a credit.   Emil: Yeah, I've sent plenty of these emails, the first time that's happened, which was nice.   Michael: But I think I think that also goes in to the point of like, in in the kind of relationship that you have with your property manager, you were talking about not sending, you know, nasty emails or accusatory emails, and I think it's innocent until proven guilty and so be the person that the property manager wants to help. Don't be the person that when the property manager gets an email from them, like, oh, god, like another email from Emil, here we go, be that friendly person, be that professional, you know, owner investor, be a pleasant person to deal with, and they are more likely to help you. I will almost guarantee you, if you send off a fiery screw, you type an email, you would have had a very different result and right now come to you for do you think so too?   Emil: Yeah, yeah. And I was I was actually just looking at this email and like, one thing I asked again, from like a point of trying to have a conversation, I just read it off. I said, How does your team assess whether it's worth fixing something or just replacing it? So I'm just curious, like, how do they decide, let's fix or let's repair or let's replace, so that I know and again, it's that place of like, let's set the right expectations with each other.   Michael: At VA, it makes total sense. Nicely done. Kudos to you and again, hats off to your property manager today. I think they went above and beyond on that one.         Emil: Yeah. I don't think it was anything special, I did. I think they were just being cool about it. Because it came out. Like they had to send the guy out like three four times and then they're like, okay, maybe. Maybe we missed this one.   Michael: Maybe we messed this one up. Yeah. Well, either way it worked out well yeah. Take that lesson going forward and use it.   Emil: Yeah, yeah, that's it. That's all we got for this one.   Michael: Short and sweet. Keep it simple.   Emil: All right, I want to thank you for tuning in, hope you liked this episode. Make sure if you're on YouTube to subscribe or if you're listening to it as a podcast to subscribe there. Wherever you listen your podcasts and with that we will see you on the next episode. Happy investing…   Michael: Happy investing.