The Dirty Truth About Property Management Only Experience Will Teach You

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Oh, property management — such a love/hate concept. On one hand, I absolutely love you because you are the reason I don’t have to spend any time (or brain power) on my real estate investments. On the other hand, you really test my sanity sometimes!

If you have invested outside of your local area or you live close to your investments but prefer someone with more expertise or interest takes care of your properties, you are probably pretty familiar with the concept of property management. Even more, you probably have stories to tell!

For any of you newbies out there who might not be familiar with property management, it actually is a great concept. Hiring a property manager (PM) to take care of your rental property investment basically allows you to not have to be the landlord. The PM will find and place tenants in your property, they will collect the rent each month and disburse it to you, they will take repair calls and coordinate getting whatever it is fixed, they will take action against your tenant for non-payment or other issues and handle the eviction process if necessary, and the list goes on. Basically, they do it all.

Sounds great, right? Well, yes, it is great. I have a PM for all of my rental properties, mostly because they aren’t local to me, but also because I have absolutely zero interest in landlording a property or ever dealing with a tenant.

So what’s the downside?


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Property Management Reality

You knew there had to be a downside coming. And no, the downside is not that they charge you a monthly fee for their services. I think that fee is well worth it and justified, and I’m happy to pay it.

The downside about property management, to me, is that it can be very tough to find a good PM.

Why is it so hard? Well, the reality is that property management is the lowest paid role in just about the entire real estate industry. This is a problem for two reasons: It doesn’t typically attract the highest quality of folks who want to work it (due to the low pay), and it opens up the temptation for PMs to try to find sneaky ways of charging you more money so they can get paid more. The latter can be talked about more in the context of dealing with bad PMs, so let’s focus on the issue of the people who become PMs and how to work with that.

Related: Investors: Believe Me, You CAN’T Afford Property Management. Here’s Why.

Good Property Management or Bad Property Management?

I think I can venture to say that the majority of PMs out there are not that great. A little later, I will expand on some more details about that in terms of how it may or may not affect your investment property, but first I want to give you some basic signs to be aware of to know what kind of manager you are dealing with.

Phenomenal Property Manager (Also Known as My Dream PM):

  • Communicates well. Keeps me posted on anything that may be going on, is easy to get ahold of, is very responsive, is thorough in answering any questions I have, and is pleasant to talk to.
  • Saves me money. Tries to fix repairs in a way that is good quality but at the most cost-effective price, will show a solid effort towards finding the lowest prices for issues, hires handymen instead of contractors whenever possible, has connections with various companies that offer discounts on repair items (and that savings gets passed on to me), offers me ideas on how I might be able to save money by doing something another way.
  • Proactive. Stays on top of tenants and the properties rather than waiting until something happens to take action — dealing with bad tenants, keeping the property in good condition (e.g. making sure gutters aren’t clogged up), planning ahead of time for a tenant turnover.
  • Inspections. Uses proactive measure to ensure property is in good condition, keeps me, the owner, out of the unknown, offers to send pictures of property for verification of condition (note: this doesn’t necessarily mean an insane amount of pictures and such a thorough inspection of the property that it takes the PM forever to do it; it really just is a basic walk-through).
  • Statements. Are clear and easy to understand.
  • Verdict? Life is amazing.


Just OK Property Manager:

  • Communicates —  kind of. I can get a hold of him, but not always easily, and he may not always be super clear with what is going on, but he seems to get the job done.
  • Unsure on the savings/deals. Is uncertain about whether I’m saving money through him or spending more money. I get occasional charges on my statement that seem legit but could be nickel-and-diming me. Unclear, but not enough to strike obvious concern. Can’t really tell if I’m getting any kind of good deals on repairs, but doesn’t seem that I’m getting bent over either.
  • Less proactive, but gets it done. Probably more accurately considered “reactive,” but action is taken quickly enough that it seems as though minimal consequence is suffered, and situations are being handled in an OK manner.
  • Inspections. These probably have to be requested by the owner — they don’t happen proactively. A report may be sent back, but might be semi-unclear and may or may not contain pictures. Often pictures that do come in are irrelevant or blurry — or may not contain much information.
  • Statements. Everything seems to be in there, but the formatting makes it almost impossible to understand.
  • Verdict? Things could be better, but the money is coming in.

Horrible Property Manager:

  • Non-existent communication. Trying to get a hold of this PM is like trying to catch a running cat. Even when something seems very important — or is very important — there is next to no response from the PM. If you do hear from him, it might as well be in another language.
  • Wipes out your investment! The point of owning a rental property is to earn income, and that’s the farthest thing from what’s happening because of this PM. Placing bad tenants, calling contractors for every repair call, evictions, vacancy periods — this PM is literally costing you your investment.
  • Reactive (maybe). At best, this PM reacts to situations. Assuming he reacts, it’s probably not timely, and it’s certainly not with clear communication. He may not even know there is a problem, and if he does know, he may not even tell you, and timeliness on getting a solution in place is extremely poor.
  • Inspections. What’s that?
  • Statements. Huh? What does any of this even mean?
  • Verdict? You could be the next subject of the TV show Snapped — and not as the person who got killed.

Related: Premium Property Management Really IS Worth it: Here’s What it Can Do For You
I’m here to tell you:

Your property manager will make or break your investment property!

Because of this, don’t ever keep a horrible PM on your property. At worst, have an OK one. How do you find a phenomenal one? You just have to keep looking until you find one. Asking around on BiggerPockets is a perfect way to start, and ask any other investors you know in the area who they use and like, start calling around to all property managers/companies you can find and start asking questions, etc. The first time I shopped for a PM, it literally took me one year to find a phenomenal one.

What if you are on the fence about whether your PM is good or not? How do you know when to fire him?

Two Different Types of Bad Property Managers

Nobody likes working with a bad PM. It’s beyond frustrating. But should you consider firing one, no matter what? Not necessarily.

I always say, there are two types of bad property managers:

  1. Ones that don’t communicate well
  2. One that don’t communicate well and cost you money

I’ll be the first person to tell you that a PM who sucks at communicating is one of the most frustrating things on the planet (unless you just aren’t concerned with your property). But if the money is still coming in and nothing excessive is going out, I don’t recommend rushing off right away to fire him and hire a new one. That does not mean you can’t or shouldn’t start shopping around for a new one, but you don’t have to do anything crazy right away.

One risk to consider that I have experienced with my properties is for some reason if you switch PMs in the middle of a tenant’s lease, the tenant may be tempted to believe they don’t have to pay rent any longer. PM switches have cost me tenants in the past. Although that may be more prevalent with certain qualities of tenants and won’t always happen, be wary.

For the PMs who just suck at communicating, it is up to you when to get rid of them if you decide to. As long as the money is still good, consider tolerating the communication levels. However, in my experience, a PM with horrible communication ends up costing me money every single time. Think about it — if they don’t care about you, why would they care about your property?

Now, if a PM is costing you a lot of money, that’s a whole other story!


When to Fire a Property Manager

No questions asked, If your property manager starts costing you money or shows signs of costing you money, fire him immediately!

This is where I have gone wrong one too many times on my properties. I’m a total sucker, and I believe my PM when he tells me everything will be fine and it’s all getting fixed. I’m zero for about 10 with that promise. Never once has a PM of mine, when things started looking bleak and he promised it to all get fixed, ever gotten things fixed or not cost me a ton of money.

Whatever you do, don’t wait to fire a bad property manager who is costing you money! He will only continue to cost you more the longer you wait, and that is just more time for the tenant or property to go downhill, meaning more recovery costs.

Things to Know About Working with Property Managers

I’m going to give you some basic tips to remember when you are working with or considering working with property managers. Also check out “Surviving the Hell We Call Property Management” for more details on the ins and outs and risks of property management.

Now, some lasting tips for you:

Remember, PMs work for YOU.

You are their boss. You own the property; you are their boss. Don’t forget this! This doesn’t mean be a jerk and boss them around constantly or micro-manage them and tell them how to do their job, but it does mean they work for you, and they should ensure you are happy (unless you are being unreasonable). If you are not happy, they don’t perform, or they jerk you or your property around, FIRE THEM.

Related: 80 Smart Questions to Ask BEFORE Hiring Your Next Property Management Company

Be Skeptical of Obligating Agreements

I don’t believe in PM agreements that say you are obligated to have them as the PM on your property for some amount of time. No way. As I said, they work for you (essentially). You are not the one who is to be contracted into some length of time with them. That’s crazy! What if they don’t perform? Are you supposed to just keep them around? No!

Keep a Close Eye on Your PM

Even a phenomenal PM can go downhill. Watch for the signs. This happened to me. I had a phenomenal PM for a couple years or more, and all of the sudden, I started seeing little red flags here and there. His communication changed, and sure enough, I ended up having to fire him dramatically — and it was bad. I let him go on too long, but I had loved him for so long that I couldn’t convince myself he could have turned on me. So always have an eye open.

Know That You Can Let Your PM Go Remotely

I have hired and fired property managers a few times, and every single time I have done it, I’ve done it via email and phone. I’ve never had to travel to my properties to handle PM hiring and firing. It can be done.

With all of the downsides of property management exposed, I still wouldn’t run my rental properties any other way. I have had PMs cost me money, I’ve had PMs test my sanity to the point of almost losing, and there have been moments where I’ve wanted to strangle someone through the phone. But even with all of that, to me none of it is nearly as stressful as having to landlord the property itself. No, thank you!

If you want to read about an instance that happened to me and reminded me why I do like property management, regardless of the drama, check out “When I Prefer Property Managers over Being a Landlord.”

Any property management stories out there you guys care to share? I know they are out there!

Leave your comments below!

About Author

Ali Boone

Ali Boone is a lifestyle entrepreneur, business consultant, and real estate investor. Ali left her corporate job as an Aerospace Engineer to follow her passion for being her own boss and creating true lifestyle design. She did this through real estate investing, using primarily creative financing to purchase five properties in her first 18 months of investing. Ali’s real estate portfolio started with pre-construction investments in Nicaragua and then moved towards turnkey rental properties in various markets throughout the U.S. With this success, she went on to create her company Hipster Investments, which focuses on turnkey rental properties and offers hands-on support for new investors and those going through the investing process. She’s written nearly 200 articles for BiggerPockets and has been featured in Fox Business, The Motley Fool, and Personal Real Estate Investor Magazine. She still owns her first turnkey rental properties and is a co-owner and the landlord of property local to her in Venice Beach.


  1. Mike McKinzie

    Once again Ali, you are right on. I could not have written it any better. Property Management does not have to be the lowest paid position in Real Estate Investing, but it is because most PM’s are so bad. They are not only bad at managing your property, they are bad at managing their own business! They incentivize turnover, they incentivize repairs, they incentivize short term leases, none of which benefits the investor. If a PM would put the investor FIRST, the tenant SECOND and themselves last, they would make a fortune with all kinds of business!

    • Ali Boone

      Hey Mike! Absolutely, I agree. You know the thing that I have found throughout my experiences with PMs is that….like you say they could make a fortune with all sorts of business….what seems to bite them is when they start growing that big. Either they have no clue how to grow business (common problem with business owners, but especially when the owner is coming from a more technical role which I’d say most PM business owners are), or I assume an already-big PM business (like big from the get-go) wasn’t grown organically so that the true ins and outs about it are really known and therefore things aren’t pleasant.

      So, I don’t know the answer….be sure a true business-minded person rather than a technician is in charge of letting the operation get big? And not sure what hitches arise in the cost-per-property versus maintaining it with personalized attention. I know I don’t know the solution, but maybe others do.

      Any thoughts?

    • Ali Boone

      Hey Lou! Ah man, what part of the S. Florida? I’m from Miami originally 🙂 And yeah, that makes me wish I had a property near you so I could have you as a PM! Becoming a PM for the reasons you mention are, as far as I would bet, the best reasons that lead to you being a great PM.

  2. Stephen S.

    I have a dilemma in that regard.

    I have been through quite a number of PM people and companies who were terrible in all the ways you list and more.

    By some fortunate coincidence I came across my present PM company and I like their work performance and results very much.

    I have an well-evolved-by-experience lease and a set of House Rules which gets attached to it. I also have some other rules for various properties: with some properties I forbid dogs and cats for example. I have always insisted that these be used and always use them when managing for myself.

    I do not allow my PM people to make any decisions and how and when to spend money. And, as I said; I now have a PM company who sources me excellent tenants who do everything well.

    Some years after I decided I liked this PM company so much I discovered that they fully ignore my lease and other rules entirely and then went forward on their own terms. After I inadvertently discovered that they are not doing what I told them to do they said: Look; we know what we’re doing and the tenants we choose are excellent. And if we think they are the kind of people who who properly manage their pets – we don’t have a problem. We don’t want to have to actually ‘manage’ bad tenants – so we only allow people to rent from you who will not be problematic to either of us.

    Well; my first reaction was rage – and that put me into a firing-mood. But I gave it some reasoned consideration and now have this dilemma:

    What the PM people say is consistently true: the tenants they source are excellent. They tend to stay in place, always pay on time, and keep their house really nice. It is always a pleasure going there as they are usually better housekeepers than I am.

    So? Do I demand that it be: my way – or the highway? After all; they Do work for me. And . . . they have deliberately ignored my long established directive. And somewhat worse: they agreed to it at first to my face but then just dismissively did whatever They wanted.


    Fire the best performing PM company that I have ever had?

    Or let them dictate how EYE will operate my business?

    What say you all?


    • Cory Morris

      Very interesting problem. I definitely say if they are doing well, why stop doing it their way? You do need to have a serious conversation about honesty and contracts though. What else did they lie about? If those things can’t get cleared up, I’d prefer a pm that isn’t as stellar but is honest.

      • Stephen S.

        Well; there is another aspect to consider now. After posting before I thought to just have it out with them and called to discuss my concerns.

        So now they have used My Own Line on me.

        Something I frequently say (I am an HVAC/R contractor) is this: “I am quite sure that you will be much happier with your Next contractor. Best of luck in the future.” This to difficult or unreasonable customers.

        When I called the PM company this time I brought up the issues I outlined here before and that was, essentially, their response.

        It makes me annoyed on one hand as I have built a life and career based pretty much on having-it-my-way for the most part. On the other hand I have to have a respect for their reaction to my complaints.

        Playing Hard Ball is a tough game. Normally in any negotiation I am always willing to walk away. And I thought I was this time. But then I hesitated thinking: am I just going to be shooting myself in the foot – just to prove that I’m The Boss.


        • Lisa Phillips

          I say Stephen – I’ve learned in business…sometimes your contractor’s way will do just as well, and give the same results, as my pre-conceived notions of how I thought it would be. I would let it go, but who to say that decision wont bite me in the butt 2 years down the road? And if they are the best company you have had…that says a lot that doing it there way works.

        • Ali Boone

          Hey Stephen, great discussion. To be clear….are you saying they told you you’d have to find another company? Or did they just say you don’t put your demands on them or you’ll have to?

          I totally see your side of it and it can be very hard sometimes to let go of how we want/think things to be done. I will say though, that having been a property owner dealing with PMs and bad tenants and being the one who has to pay when things go wrong, if a PM company was putting excellent tenants in my properties…I’d let them have their way! Good tenants, solid income….that is a dream. And it’s so hard to find PM companies who really live up to that. So, I know I would be all for it.

          My stance on PMing has always been….you put good people in and I get paid consistently and you don’t charge me random things and you stay in touch over anything important….you can do things however you want to do them and I won’t micro-manage you a bit.

          However, if I feel sketchy about something or money isn’t coming in right or you aren’t communicating or something feels off….you can bet your bippy I will turn into a raging micro-manager. At that point the writing is on the wall that the PM should be fired anyway, and eventually they always are, but it’s a big difference from the former.

          So I guess I would end with asking….what would you gain by enforcing this company to use your rules?

  3. Some areas don’t attract good tenants or management. If you constantly have issues you might be in one. If your area has high turnover and management has incentives for turnover that can be a problem too. Most of management good or bad is tenant and location centered. The best managers can’t fix a bad location.

    • William Morrison

      I agree but it’s just as bad in some better areas. The 270 corridor in Maryland near DC is pretty tough to come by good management. Ali’s middle group seems to be the most you can hope for. I had several sometime an individual works out well despite the firm. But in an when they leave it’s back to the middle if your lucky.
      High Tech High Cost area, may be too many higher paying alternatives. Don’t know why for sure, just know it’s so. And I’m not just speaking for myself. I ask about every landlord I meet and Meetups or where ever.

      I do have a PM from Ali’s top group for my properties in Charlotte, NC. Just depends, the reasons seem to be different for different areas.

    • Ali Boone

      Absolutely Walter. Some really good managers can make things like low-income investing a good investment (when it really is reliant on a specialist to make it happen), but your point is very valid and should be considered when choosing places to invest. It’s like choosing markets…always look at the fundamentals. I always look for places that will attract better tenants, because I’ve found nothing more costly than bad tenants, and hopefully that helps with PM options too.

  4. Nicole C.

    The problem is as an investor you have to treat your PM like a human lol. Be proactive and hands on when choosing a PM and not rely on a property management company. We all have unique personalities that fit each perspective manager. Lastly if you pay correctly you will get better results. Here in LA covering rent is huge because rent is soo high so salary on top of that is a huge when 2 bed run 2000 and up is bliss. Just because you are an investor does not mean you have leadership qualities and that can also be the issue with bad property management. I am being devils advocate here

    • Ali Boone

      No, I totally agree Nicole. I actually should have put a caveat in the article when I was talking about the investor is the boss over the PM. The note would have been something like “Note: just because you are the boss does NOT mean you get to be a {insert choice word here}”. It’s just like being the boss of any company or group….just because you are the head cheese doesn’t mean you can get away with not respecting your employees, treating them unfairly, or undermining them constantly. It’s a fine line between how to be a good leader and encouraging your employees, and it’s not an easy balance to figure out. Exact same applies with investors and PMs.

  5. Garrett May


    Your perspective on great PM vs. horrible PM is spot on. Although, I am a relatively new buy and hold investor, I know that communication is critical to me. The person that I was going to hire to manage my first property last year had a huge problem of communicating with me. Before, I got any farther into the relationship, I informed him that his services were no longer needed. I ended up finding my own tenants and doing every thing else for the property. I know that moving forward, I need to find a quality PM, because I already have a full-time job, and have no interest in being a landlord. Thank you for the article.


  6. Curt Smith

    Hi Ali, When ever I read these PM posts I read and I keep on thinking. Why isn’t someone saying every house farther away than 2 hrs does NOT automatically mean you need a PM? How so? Well what if the renters never need constant hand holding? What if the house doesn’t break and need fixing?

    Doesn’t it follow that if the renters don’t call, the house doesn’t break you don’t need a PM?

    What I’ve learned is that if you don’t set an end point as a goal, you won’t achive it. IE if you don;t say at the onset, I will buy distant rentals that don’t need the PM over head, then guess what you’ll end up with rentals that must have PMs.

    No space here to go into “how to buy rentals, run a landlord business, that does NOT need a PM”. We first hand know this is entirely possible. Folks I just want to mention that if you set as a goal to only buy rentals that don’;t need a PM, you have a chance of not needing a PM. Start by asking: for your area where do folks who never need help want to live, what type of property do they want to live in?

    The shortest possible tip is: buy rentals in great schools 7 or better, select for young families who say they want the local school district, over fix, under price… they’ll be happily trapped in your rental. 🙂

    • Ali Boone

      Hey Curt, great point and something definitely to be considered. The only counter I would offer to that though is that not everyone would prefer not having a PM. I’ve had properties that fit your criteria before, and one of them I did have a tenant in for over a year without a PM and it was doable. However, that property was in an area that was nice enough to attract that kind of tenant consistently, but that area always wasn’t very conducive to returns (I didn’t mean to have it as a rental property, it was my house I lived in before I moved). So, the trade-off between areas with the best tenants and the areas with cash flow can get a little blurry. But more the point….not everyone is trying to avoid PMs. So I’d say the first question even before yours should be–do you want to position yourself to be able to landlord your own property more easily, or are you okay with using a PM? Then if landlording is of interest, follow the rest of your advice.

      I don’t want to landlord my own properties, ever. I don’t care how easy.

  7. Steve Vaughan

    Thanks for the tips, Ali. I’ve always self-managed, but am considering investing out of area as you do. I plan to select a PM who has investment properties themselves. Hopefully our goals will be better aligned that way. The inherent problem I see is that they are best compensated when we are going through turnover and repairs. One of my qualifications is that the PM at least ask a couple basic questions when they receive a repair request before they send out the $100/hr repairman. I work through tons of requests quickly on the phone. High repair costs from complacent PMs has introduced me to many a motivated seller over the years!

    • Ali Boone

      I absolutely agree Steve. One of my first questions to any prospective PM I talk to is– If a tenant calls you and says the toilet is running, how do you handle that? I don’t want a PM who is going to immediately call a contractor for anything, but especially not something like a running toilet. $10 says the toilet floaty ball just needs adjusting. Even I could do that. I want a PM willing to go check it out before deciding to who call to fix it. In the case of the toilet floaty ball, adjust it for me. 🙂

  8. Brock Adams

    Enjoyed the article. Nobody has your properties best interest more than YOU. Most PM are managing their own properties in their portfolios along side yours. Could be a conflict of interest in my opinion or at best who’s interest will come first. I have seen many types of business with an absentee owner. Most do not succeed in my opinion and those that do might as well be managing their businesses themselves.

    • Ali Boone

      Hey Brock. Good input. But why if a business is doing well with an absentee owner, should the absentee owner need to jump in and manage himself? What would that gain? And as far as conflict of interest, I totally hear your point. I’m not positive I see though what the difference in interest would matter when comparing your properties to his….unless both properties light up on fire at the same time and he has to choose which to save? Kind of unlikely though.

  9. William Morrison

    Ali I enjoy your replies as well as you post. Must be the Enginear in you.

    It seems tenant placement and ongoing management have some different skill sets. The first when done well can cover up some issues with the second. A good long term tenant is certainly the goal. I think from this post a previous posts we seem to have a similar to our investments and the idea of not looking for a new career or business.

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