Why Are All The Bills My Manager Sends Me So High?
My manager in Ohio just sent me a bill for mulching the front garden and the total is $130! I mulched it myself last year and it couldn’t have taken more than an hour and maybe $20 worth of mulch.
Jeff Sanderson, Gulfport, MS
Hi Jeff,
I can relate only too well. But before you get upset and chew out your manager, I want you to do something. Take a look at the account and see what kind of cash flow this property has. (I know you’re keeping a running tab of its annual gain/loss, aren’t you?). Try to look at the bigger picture and see how much maintenance is really costing you. Because there’s two things to consider here, first, that maybe the guy who did the work didn’t mention the half dozen other little things he attended to simply because he didn’t feel like writing it all down, and second, that maybe your manager does pad the bills a little bit to make up for the fact that you’re not actually paying him anything to oversee the mulching. Managers don’t really make that much money, 10% of rents is standard, plus 50% first month’s rent when they find a tenant, so I wouldn’t be surprised if a little padding does go on. But the main thing you want to know is, are the cumulative charges excessive. If you didn’t get any maintenance bills for the last four months, and this is the only one this month, it seems to me you’re probably doing okay. You have to expect to pay about 1% of a house’s value in maintenance every year, so that’s the number you really want to be looking at. If you’ve got a manager who’s keeping the place rented and not springing any nasty surprises on you, you’re ahead of the game so the last thing you want to do is micromanage him.
Yes, padding these bills is technically illegal in many states, but that doesn’t mean it’s not going on. Your manager probably has a clause in the management contract entitling him to charge you an hourly fee for overseeing repairs, etc., but most managers have probably long ago concluded that it makes them highly unpopular to exercise such rights. If they can find a workman to do the job well, but tack a little extra on to pay everyone for their time and trouble well that’s probably an easier solution. It really doesn’t matter, what matters is the final number. If you were still managing, after all, you wouldn’t be taking into account all the hours you spent doing little things around the house or waiting in line at Home Depot to buy the mulch you then have to schlep over to your rental house. If you did, you might find out that $130 isn’t so ridiculous after all.
