Business Management

Managing Your Property Manager: How to Set the Right Expectations

Expertise: Business Management, Landlording & Rental Properties, Real Estate News & Commentary, Real Estate Marketing, Personal Development, Real Estate Investing Basics
106 Articles Written

As a property investor, it's completely normal and expected for you to hire a property manager to convert the investment property from a daily grind to a more or less passive income stream. But there's a surprising amount of variation in that "more-or-less," and a lot of it has to do with how well the investor can manage the manager. Over the next month, we'll be looking at the most effective ways a property investor can be assured that his manager(s) are acting appropriately.

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Managing Expectations

The term “managing expectations” comes to us from the world of public relations, where it’s all about manipulating the public into having realistic expectations of your product — but it certainly has useful applications in the corporate and financial worlds as well. In this context, it’s all about ensuring that your property manager expects to work as hard as you expect him to work. So how do you get that assurance?

Related: The 6 Non-Negotiable Habits of a Top-Notch Property Manager

Step 1: Communicate What You Want

The biggest mistake you can make as a property investor is to assume that because you’ve purchased a house and hired a property manager, your part is done. A great property manager will make being an investor easy, but nothing will make it a zero-effort situation. Your role is to bring a clear vision to the table — communicate your goals, your desires and your rules to the property manager clearly, and have the property manager say them back to you so that you know they are truly thinking of the situation in the same way you are.

If you don’t have a goal or a plan, make one. Then communicate it clearly to the property manager. If they don’t understand your end game, they can’t help you reach it, and they’re guaranteed to do something, at some point, that isn’t in your plan.

Step 2: Communicate What You Need

It’s important that your property manager understands your goals — but it’s just as important that they understand what you need. Not in long-terms either, but in a weekly, monthly and annual sense. Property managers are accustomed to collecting rent, paying bills, overseeing maintenance, evicting tenants and advertising for new ones, but some seem to have an extraordinary ability to delay doing them in a costly manner, and others are notorious for failing to document the things they do sufficiently.

Ensure that before your property manager begins advertising for your first tenant, they have a workable system in place that gets you all of the documentation and other paperwork you need every month so that you can be assured everything really is running smoothly.

Related: A Great Property Manager is More Important Than a Great Property: Here’s Why

Step 3: Listen When They Talk

A property manager works for you — but that doesn’t mean they’re a gopher. You hire them because they have experience and expertise doing something that you don’t. This means that it’s quite likely that at some point during this process, they’ll present an objection to one of your expectations. That’s normal! It just means that it’s time to sit down and have an honest, in-depth discussion on how you can get as close to your goals as possible while working within the real-world limitations the PM is dealing with.

Give your property manager a solid understanding of your goals and your end game, and a firm list of tasks you expect to see completed every month — and then be flexible in allowing him to work the way he needs to, and in listening to his expectations for you. The more clearly and bilaterally the communication flows in the beginning, the more functional and profitable your relationship will be in the long run.

How do you manage expectations when it comes to your property manager?

Let me know with a comment!

While in the mortgage business, Drew rose to a VP position at the first broker he worked for and then started his own company. In the pursuit of excellence, he obtained several mortgage designation...
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    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied over 5 years ago
    I would also add that the one with more power in a negotiation is the one willing to walk away. You should make this obvious to a property manager which should give them an extra incentive to keep you happy. And if they aren’t getting the job done, don’t be afraid to switch.
    Douglass Belt Investor from Madison, Wisconsin
    Replied over 5 years ago
    Great post and points! I am looking forward to the upcoming articles on this subject and learn from them!
    Lois S. Investor from Brentwood, California
    Replied over 5 years ago
    @ANDREW SYRIOS ” And if they aren’t getting the job done, don’t be afraid to switch.” How do you ‘just switch’ if you have a contract for a term – say one year – with the entire fee due even if you terminate the contract? Is this a common clause in PM contracts?
    Tim Booz
    Replied over 5 years ago
    This is a great article, Drew. I’m going to share it when I come across new owners who are just starting to explore the idea of hiring a property manager.
    Tim Booz
    Replied over 5 years ago
    This is a great article, Drew. I’m going to share it when I come across new owners who are just starting to explore the idea of hiring a property manager.
    Lledenhia Romero Investor from Mount Sterling, Kentucky
    Replied about 3 years ago
    great information, unmet goals and expectation will make you loose thousands of dollars every month especially if you have 3 unrented properties for 3 months. some managers don’t really care because its not theirs