Ken Doble joins Multifamily X Podcasts to break down what owners get wrong when they hire third-party management companies. He explains how mandatory junk fees, a $15 resident liability fee, tech fees, a $120 parking fee, and locker fees, can push an all-in rent $200 above the comps and trap a property at 83% occupancy. He shares that all three of his third-party managers cost him north of $50,000 each on utility setup lag after closing, worst of all in student housing. He walks through his Five Ps framework, People, Pricing, Promotion, Product, and Process, from his book The 5 P's of Property Management, noting that nine out of ten problems on a property are people related. He describes catching ghost leasing staff who were billed as payroll but were not on-site, duplicate purchase orders disguised as budget overruns, G&A costs exploding 200% to 300%, and bad debt reports manipulated by changing the filters. He covers switching costs as a management moat, vendor kickbacks, read-only access to the property system, and fixing every outstanding work order before judging a maintenance team.
Media · Multifamily X Podcasts
Ghost Employees, Hidden Fees, and Bad Reports: Ken Doble on Third-Party Management
What they cover
- Mandatory junk fees that push all-in rent above the comps
- Ghost employees billed as payroll who never showed up on-site
- Utility setup lag after closing costing $50,000-plus per manager
- Switching costs and the property management moat
- Duplicate purchase orders disguised as budget overruns
- The 5 P's framework and why people break first
- Broken incentive plans on-site staff don't even understand
- Reading G&A: travel, chargebacks, and 200-300% cost spikes
- How report filters can hide bad debt from the owner
- Vetting a manager: the one interview question that matters
In Ken's words
We discovered they weren't even showing up, even though they were telling me they were, and we were being charged payroll as if they were there. Once they started showing up, imagine that, we started leasing.
I've had three different third-party management companies, and all three of them cost me north of $50,000 on the utility setup.
If you're the owner and you don't understand how the reports were built, then you're being misled. Maybe it's intentional, maybe it's not. But if you don't know to look, how would you know?
Nine out of ten times, most of the problems on your properties are people related.
I made a deep dive into copywriting and marketing, and all it revealed was how ignorant I was. All I had been doing was copying what everybody else was doing.
Give me an example of a property you took over and screwed up, and what you did about it. Don't tell me, show me.