We think that property management is outdated and in need of a redesign. Central to this idea is that the current fee structure is overpriced and hasn't changed in decades despite two significant structural changes:
1) There have been vast improvements in software, online banking, rent collection, tenant screening, income/expense tracking tools, tax compliance, etc. that lower costs, improve response times, and increase consistency.
2) Residential rents in cities like Washington, DC have dramatically increased relative to median household incomes.
And yet, despite the decreased management costs due to software and the drastic increase in rental rates, DC property managers still charge on average 10% of residential rent.
For example, think about how rent collection has changed: decades ago property managers would have to open envelopes with rent checks and physically walk the deposit to a bank; they'd have to cross reference every due date to ensure tenants weren't late with rent; if a tenant was late, they'd have to call and remind him or her to pay. Today, rent auto-pay and direct ACH deposit make deposits faster and more consistent. Scheduling software makes it easy to see if someone is late on rent and automatic texts can instantly remind a tenant that their payment is due. Great tech should make property managers far more efficient than they were years ago.
Most property managers aren't effectively incorporating modern technology in a way that significantly increases productivity, but we don't believe that is an excuse to overcharge landlords. Squire charges 7% for property management and has completely eliminated every additional management and maintenance surcharge fee.