Hi, there! Joe White here from Grow Property Management, your trusted property management company in Philadelphia.
I just got off the phone with someone inquiring about having us manage his three rental properties. Unfortunately, I had to tell him we likely wouldn’t be the right fit. He kept circling back to try and renegotiate every single fee. I understand the instinct; every investor wants to maximize returns, but our services are built differently. Our clients don’t come to us to save money. They come to us to make more money by leveraging our expertise, efficiency, and systems. That word “leverage” is key.
If you’re a property owner thinking about working with a management company, you should think about leverage above all. You’re not just hiring someone to manage your tenants or collect rent, you’re bringing in a partner who can streamline your operations, reduce costly mistakes, and ultimately help you earn more. While it’s fair to ask about discounts, we simply don’t negotiate fees. Our margins are already razor thin, and to my knowledge, we are the most competitively priced property management company in Philadelphia. What sets us apart is that our pricing is 100% transparent. Everything is listed clearly on our website. You know what you’re paying for… no hidden costs, no surprise fees.
In contrast, many companies may dangle a low headline number in one area but load their agreements with hidden fees elsewhere. What looks cheaper at first ends up being significantly more expensive in the long run. The reason we can maintain such low fees is that we run efficiently. And that efficiency comes from doing things right the first time, especially tenant screening. Evictions, for example, are extremely time-consuming and costly, both in money and in stress. Because we screen tenants meticulously, we avoid many of the issues that lead to eviction in the first place. A company that’s constantly going through evictions is a company overwhelmed with avoidable fires. That chaos comes at a cost, and you better believe it’s passed on to the client.
So when this prospective client reached out and started focusing entirely on discounts, it became clear we weren’t aligned. He was reaching out to the top-reviewed property management company in the city, yet seemed determined to treat the engagement like a bargain hunt. That’s the wrong mindset for an investor. Your focus should be on ROI. For example, can I spend X on property maintenance or professional management and get Y in rent or reduced vacancy? It’s not about shaving every penny, it’s about maximizing overall return.
This same logic applies to working with real estate agents. I’ve never understood why someone would hire a high-quality agent and then try to negotiate their commission down. If you’re paying them less than they usually earn, how motivated do you think they’ll be? Why would they go the extra mile for your listing when they’re not even being compensated fairly? People often underestimate how much value a strong real estate agent brings to the table.
Years ago, Zillow published data showing that top agents were consistently selling homes for $22,000 more than Zillow’s own property value estimates. That’s a staggering figure, especially when the average Philadelphia home was around $178,000 at the time. A $22,000 swing can make or break your return on investment. So are you really saving money by getting a discounted agent to maybe save 1% on commission, only to lose tens of thousands on the final sale price? No, it’s just not smart investing.
This isn’t me venting. We decline more than 80% of the prospective owners who contact us. I’m not upset this guy asked for a discount. I’m using this experience as a teaching moment because I think a lot of newer landlords and property investors fall into this trap. They focus on what they’re spending rather than what they’re earning. My advice is to focus on value, not just cost.
In fact, I’d argue that the best property management companies tend to be both the most efficient and the most affordable in the long term. If you’re spending your week constantly putting out fires, dealing with tenant complaints, or repairing botched work, of course you’ll end up charging more. You’re buried in problems. But if you’re running a well-oiled machine, the benefits ripple outward, to the tenants, the owners, and the bottom line.
Back to leverage. Every decision you make as a property owner should be rooted in that concept. Will this expenditure get me a greater return? Will painting the unit attract better tenants and reduce turnover? Will hiring a reputable company save me from the long-term headaches of poorly managed property? If you view every maintenance or marketing expense as a loss instead of an investment, you’re going to have a hard time growing your portfolio.
Based on my conversation, I suspect this gentleman doesn’t take that view. I doubt he believes in investing in the presentation of his properties. He likely sees hiring cleaners or painters before turning over a unit as a waste of money, rather than a strategic move to minimize vacancy and attract quality tenants. That’s not how seasoned investors think.
Most of us who’ve done this for a while understand that taking care of a property yields better outcomes across the board. Tenants respect clean, well-maintained spaces. Those spaces rent faster and for more money. And when tenants feel valued, they stay longer and take better care of the unit. That’s smart investing. That’s leverage.
So while I may have had to turn down this particular owner, I hope this message resonates with others. If you’re serious about growing your rental portfolio and increasing profitability, stop focusing on cutting corners and start thinking about how to maximize every dollar you spend. That mindset shift will serve you well.
As always, I’m just a humble Philadelphia property management company owner doing my best to answer your rental property investing questions. Until next time, happy rental property investing.
