The average number of days to fill a vacancy in Houston on the MLS is 40 days. Every property manager charging low vacancy fees does not use the MLS (they can’t pay for it) and typically takes up to 90 days to fill. They do not list on the MLS and lose you thousands of dollars. The bottom line is if they are charging you less than 1 month’s rent they can’t afford to fill your vacancy quickly. The math doesn’t lie. In this chart below I’ve broken down how much extra money is being taken out of your pocket with a 50% vacancy fee. They are saving you pennies to cost you dimes.
|Days Vacant||Rent Lost on ($1650 Monthly Rent)|
|20 days and 1 month rent (our fee)||$2,750|
|40 days and 50% rent||$3,025|
|70 days and 50% rent||$4,675|
|90 days and 50% rent||$5,775|
Not so good of a deal is it? You can’t shortcut best in class processes and get best in class results. Hire bad property managers, lose hundreds or even thousands of dollars. I would like to say there is one secret, but there isn't. It’s a function of consistency and quality across the entire vacancy journey.
Budget property management companies are upcharging for maintenance and do not keep in house maintenance staff. How do I know? Before I grew big enough to support my full maintenance team, I farmed out our excess time to the two largest property management companies in Houston. Both companies up-charge all maintenance 15%. The reason they don’t have to tell you is that they tell the maintenance team to bill for 15% more and then are paid 15% of the contract as a “marketing fee”.
Maintenance typically runs 5-7% of rents for a single family house. Most houses will have between $200-250 a month in Capex. Your manager is also taking this from you and not telling you.
|Maintenance as Percent of Total Rent ($1,700)||Total Yearly Maintenance and Capex (250 per month)||Maintenance and Capex Up Charge|
All hidden fees they don’t want you to know about. They are incentivized to find you the most expensive vendors they can to make more money.
As I explained in one of my posts most maintenance requests at these companies take up to 3 weeks to perform simple maintenance. If an AC goes out in the summer, do you think a tenant is going to be happy with no AC for three weeks? Keeping a tenant in your property for another year is the number 1 way to save money. StageCoach renew around 70% of our single family homes. Most companies have about a 25% renewal. Over a five year period you lose $1,000s of dollars. Let’s say that you renew 1 extra time with the “cheap” company. You are looking at losing $3-5K off that one decision.
|StageCoach vacancy cost over 10 Years ($1,700 Rent and 1 Mo. Rent Fee)||Their Vacancy Cost over 10 Years ($1,700 Rent and 50% 1 Mo. Rent Fee)|
Why does StageCoach have our own vacancy team? Why does StageCoach utilize the local MLS? Why does StageCoach list your property on 80 websites? We do it because it makes you more money. We do it because it’s how you develop long term wealth and achieve your dreams.
I talked with a property manager of the largest PM company in Houston. He was the main point of contact for 24 single family homes. I enjoy networking with other pm owners because I want to ensure we offer the best in class service. This is how the conversation went:
Me “Hey thanks man it was a pleasure chatting with you on the phone. We should get together for lunch some time. I’m always interested in growing.”
Him: “Ah Kevin i would love to, but I’m in Mexico City.”
Me: “Ok when do you get back into town?”
Him: “I’ve never even been to the United States.”
I only hire folks who live in the city of Houston to be my property managers. I know the importance of face to face meetings to fill units, understand the market, and maximize property values. If your apartment is rented faster, and rented for a higher price you cash flow thousands of extra dollars.
I only hire property owners into my company. I want everyone in my office to have an owner’s mentality and be actively looking for deals. I’ve helped clients in our property management company purchase over $12M in real estate through brokers and deal sourcing. Getting opportunities to purchase great property is key to growing your portfolio. StageCoach review our owners possible purchases and discuss long term investment strategies to help each owner achieve their goals. Let us help you.
Property management is hard. Real estate investment is hard. Anything worth doing is hard. We want to ensure you get 20%+ returns on your investment. You deserve it. Your family deserves it.
StageCoach charge you a fair price and are honest about it. Let us help you achieve your dreams and let your property perform the way you intended when you purchased it. Enter your info below and see the StageCoach difference.