Hired the 6% manager to save $792 a year, cost me about eight thousand

Asking the thing I'd have been too embarrassed to ask in a room: what is "average days to lease" actually measuring? Days from the tenant giving notice, from the unit being vacant, or from the day the listing goes live? Because I can imagine a shop reporting 22 days honestly while a unit sits empty for two months before it gets photographed.

compass, that's the right question and the answer is it varies by shop, which is why you ask them to define it. I've been reading everything I can find about screening because my first rental closes soon, and verity, the part that scares me most in your post is that written criteria existed and weren't followed. What does an owner even do about that? Do you get to see the application file on a denied applicant, or is that off limits?

This is the exact thread that makes me hesitate on the whole idea. I want income without a second job, and what I'm reading is that the manager is a second job with extra steps unless you pick very well.

marlow, I read it the other way. verity got a bad outcome from one decision made on price, and the fixes listed at the end are four questions asked before signing. That's an afternoon, not a job.

verity, of the four things you'd do differently, which one do you think would have caught it earliest?

The fee spread mattering less than performance holds at every size I've looked at. On a single door, 4 points of fee on $1,650 is $66 a month and one extra vacant month is $1,650. The performance term is 25 times the fee term. At institutional scale the fee spread starts to matter because the performance is contractually held to standards, and a small owner has no such thing.

What I'd want to know, verity, is whether the 6% shop was underpricing or just new. Those look identical from outside and diverge completely after 18 months.

I'd name the cause differently. The 6% wasn't the problem, the absence of local staff was. A shop growing on price is usually growing on remote staffing, and a unit with six dusk photos sitting 71 days is a unit nobody physically visited. Cheap fees are a symptom of that model, and there are 10% shops running the same way.

I hold long and I've had one manager for eleven years. What I check annually isn't the fee, it's whether the person who answers my calls is the same person as last year.

"Treat a below-market fee as a question about how they make money." That sentence applies to about six other corners of this business.

verity, how did you get out? I ask because I'm slow on decisions and my worry is signing something I can't exit for a year. What did the termination clause say, and did they charge you anything to leave?

One caution on the 71 days number. You compared it to 25 to 30 days that other local shops quoted you, which is their own reporting on their own portfolios. If the season was wrong, and a lot of markets see leasing slow badly in November through January, some of that gap is calendar rather than competence. I'd want the shop's monthly days-to-lease for the same product over twelve months before I assigned all 40 extra days to them.

Doesn't rescue the screening file though. No landlord reference call and no employment verification is the piece I'd be angriest about.

windlass is right that seasonality is real, and it still doesn't explain leasing $75 under asking. If the market was slow, they should have told the owner the market was slow and recommended a price. Cutting rent without a conversation is a shop optimizing for its own occupancy stat.

This thread just added four questions to a list I've been building for six months. That's a better return than the last three podcasts.

The reference check that actually works: ask the shop for three owner references and then ask each owner one specific question, what was your longest vacancy in the last two years and what did the manager tell you while it was happening. Generic "are you happy" questions get generic answers. That one gets you a story, and how they handled the bad month is the thing you're buying.

I'd also ask for one reference from an owner who left. Some shops will give you one. That's a good sign about the shop.

Go back and read the agreement you signed, because I'd bet money on what it says. Almost every management agreement I've read disclaims liability for tenant nonpayment and for the performance of any tenant the manager placed, as long as they followed their stated procedure. Some of them also carve out an eviction coordination fee and make the owner responsible for court costs and attorney fees, so the failed tenancy generates revenue for them on the way out.

The leverage you had was the gap between their published screening criteria and what was in the file, and whether that gets you anywhere depends on the specific contract language and on your state, which is a lawyer question and not a forum question. What it does buy you, cheaply, is a clean exit conversation.

verity, for the next agreement, the clause I'd ask to add is a requirement that the completed screening file be available to the owner on request for any placed tenant. Cheap to ask for, and a shop that refuses has told you something.

Worth saying that 71 days isn't automatically a scandal. In the rural markets I look at, 60 to 90 days on a $900 house is ordinary and there's no fixing it with better photos, the pool of tenants is just small. The daily cost math is what matters and verity's is right, $54 a day is brutal. On my price points a long vacancy hurts less per day and the screening failure hurts more, because the replacement tenant pool is thin and you can't afford to burn a house on a bad one.