Landlording & Rental Properties

How to Protect Your Investment Property Against Unethical Property Managers

Expertise: Landlording & Rental Properties
61 Articles Written

Just yesterday, I met with a couple who owns a vacation home, and just hearing their story makes my blood boil.

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There is an old saying, "One bad apple spoils the bunch." Well, one bad property manager can spoil people's opinions about a whole industry of people. This young couple bought a vacation home 2 years ago to enjoy while their children were still very small. The property manager promised to rent their property out for them, but every time he called them, he was asking for money. He blamed the bad economy, lack of amenities in the unit, newer properties renting their houses for less, etc. as just some of the reasons why this house had never rented.

While visiting his vacation home, the owner was contemplating taking it off the short term rental market and just using it for him and his family; after all, he would save money since the property manager was never renting it out. This is where the story gets interesting. The next day the owner of the property asked a guy who was renting long term next door what he thought about him taking it off the rental pool.

The guy who lived next door was shocked, saying that the unit had guests in it all the time; he thought the owner was making a killing by owning the property. The owner laughed and said he the property manager has told him there were never any bookings in the house. The owner’s next step was to call the local utility company and ask for a history of the utility usage on the property (now, even though he owned the property, the account was not in his name so this was not that easy to obtain). He was shocked to see that the electric bill did in fact show the property was booked all the time.

Related: 4 Revealing Questions to Ask Prospective Property Managers

Now, this is the most blatant case I have ever seen of a property manager not reporting bookings to a homeowner. Most of the time an unethical property manager will skim a booking or two here and there. In this article I would like to show you some ways you can make sure you are getting paid for all the bookings going into your vacation home.

5 Clever Tips to Protect Against Unethical Property Managers

Pay Your Own Utility Bills

This sounds simple, but your monthly utility usage should go hand in hand with your online booking calendar. After all, when guests are staying in your house, the electrical usage should go up. This is a very easy check and balance to put in place.

Lock Box

There are many lock boxes on the market that have wifi capabilities. These lock boxes allow the owners of the vacation home to change the lock box codes all the time, and they also have the ability to send a usage report to the homeowner on a weekly or daily basis. If the lock box is being used all the time, then the owner knows someone is staying in the property. These lock boxes can be purchased for around $350 to $500.

Guest Book

We recommend all owners set out a guest book on the kitchen counter. In here the owners should have a picture of their family and explain how much fun and pride they take in owning their vacation home. They should also wish the renters a good time and share their experience here in the book.

The book pages should be labeled at the bottom (1, 2,3, etc) so if a page is ripped out, the owner will know about it. This serves 2 purposes: 1) the owner can ensure the property is being well taken care of 2) the owner can ensure he is getting paid for guest bookings.

Security Systems

ADT, NCA, and other alarm companies can install a security system for around $30 a month that can send reports as to when doors and windows are open. This is a great way to track who is coming and going out of your vacation home, plus guests love the extra peace of mind that a security system allows them to have.

Related: 4 Simple Tips to Find the Right Short Term Property Manager

Get to Know Your Neighbors

You should get to know your vacation home neighbors, especially if they stay at their property all the time. Let them know that you live out of town, and ask them to keep an eye on your property for you. Remember these friends during holiday times by sending them a small gift and take them out to eat while you are in town. These neighbors will give you the best insight as to what is going on with your property.

There are literally hundreds of ways to make sure a property manager is not sliding a booking into to your house without compensating you for it, but these ideas are all low cost and low maintenance ideas. As long as you have safeguards in place, an unethical property manager will probably not mess with you. I welcome all comments below letting me know how you ensure you get paid for all the bookings staying in your vacation home.

What are your best tips for making sure property managers don’t take advantage of your rental?

Leave a comment below!

Trey Duling is the President/CEO of, a large travel company specializing in Florida getaways. He has over 27 years of experience in the area, owning multiple companies that market to guests looking for an Orlando vacation. His main focus is marketing hotels and short-term vacation rentals near Disney World, with ample expertise as the largest authorized ticket seller for the large attractions in Orlando.
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied about 6 years ago
    I am speechless, Trey! I think property managers get a bad rap in general, but this really takes the cake. I hope they sued him.
    Susan Goldthorp Investor from Mims, Florida
    Replied about 6 years ago
    That’s not just unethical surely it is fraud
    Lance Robinson Real Estate Investor from Utah
    Replied about 6 years ago
    Thank you trey, Ive dealt with both sides and sometimes it seems the really good ones are few and far between. Thanks for sharing, 5 good tips. The best one is the “get to know your neighbors”, the saying Nosy Neighbor is exactly what you want here. I had a house I was renovating and the neighbor called me twice during renovation process to tell me someone , “suspicious” was fooling around on site. These are the kind of neighbors you want on a vacation rental for sure.
    Account Closed Homeowner from Memphis, Tennessee
    Replied about 6 years ago
    Good stuff, I appreciate this!
    Steve Osowicz Real Estate Broker from Shelbyville, KY
    Replied about 6 years ago
    This is unfortunate, I had a similar experience managing properties. We had an investor in California call (we are in Kentucky) he owned a 4-plex and was having issues with his current manager. We took over management, however, when I reviewed the statements, it showed only 3 of the 4 units were occupied, but when I went for a visit, all 4 units were occupied. So basically the manager was collecting cash (we only took check or money order) we assume keeping 1 of the rents and just telling the owner the vacant unit was being advertised. We requested numerous times accounting reporting all transactions for the property, but the old property manager did not supply the information. Unfortunately the owner did not want to proceed with any legal proceeding against them nor did they want us to contact the real estate commission here, so they were able to get away with it.
    Jeff Jenkins Real Estate Investor from Rosenberg , Texas
    Replied about 6 years ago
    Two of the things I always encourage my clients to do is one, avoid long-distance rental properties, and two, manage the properties yourself. It baffles me when investors outsource the management of local, single families. Why? Managing a property requires very little time. When managed properly they practically run themselves. If you find yourself working much then you’re either managing inefficiently, or you have too many properties. If the latter, then you are probably ready to move into multi-family.
    Drew Sygit Property Manager from Birmingham, MI
    Replied about 6 years ago
    Great topic, we just want to offer a different point of view: 1) A smart owner should expect to be able to hire out property management (PM) and NEVER have to visit their property or get to know the neighbors. 2) We disagree with Jeff Jenkins as there are a lot of issues the average person with a day job may not be able to effectively handle. The average DIY landlord can handle up to 4 properties, IF they are well organized. Most people aren’t attentive enough to their rentals and a good PM can usually pay for their services via higher rents, high rent collection and lower losses due to nonpayment. OTHER WAYS TO MONITOR PM’S: 1) You don’t have to pay utility bills, you should expect scanned copies of ALL bills & invoices. 2) Hire a 3rd party to randomly driveby your property. The frequency should coincide with the length of the lease. If a one year lease – check annually. If a lot of turnover, maybe quarterly. INSIST on a video!!! UNBELIEVABLE that more investors & PM’s don’t use videos when 99% of cell phones can take videos! 3) Check on the PM advertising to make sure it agrees with what you’re expecting. This will avoid a PM renting out your property for $1000/month and telling you they’re only getting $800. 4) Pretend your an interested prospect and call on the ad for your property. In the case of the owner in this article, they would have quickly found out the property had limited availability as it WAS being rented. Hope this helps. Again, a great topic!