Which is Better: A Large Property Management Company or an Individual Property Manager?

by | BiggerPockets.com

I’ve recently had to start interviewing new property managers. At the same time I started my search, I had a client who was doing the same thing. He happened to ask me a question at exactly the same time I was wondering the question myself:

Should I go with the large property management company or an individual property manager?

The two potential options for a new manager that he had identified, one a large company and one an individual, seemed legit. He was trying to weigh them both when he asked me which would be smarter to go with.

I had just been wondering this myself about my own properties.

Because I hadn’t gotten a solid answer about this for myself yet (still haven’t), all I was able to do was provide him with details of my experiences with property managers over the years — both larger companies and individuals — and let him make a judgment call from there.

I honestly don’t know the answer. I’m sure it’s safe to say there is no perfect equation and no way to always know which will be better. But if you are left with two seemingly equal options for a property manager and both seem equally promising, do you go with the large company or the individual?

What I’m going to do is give you the pros and cons of each. Chime in with any other ones you can add to the list, and let’s see what we come up with.

Here goes.

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Large Property Management Companies

The absolute most critical detail about a large property management company is simply how they are set up. If a large company has been built correctly and is maintained correctly, then there shouldn’t be any major problems. So keep that in mind as I list out the pros and cons of a large property management company. It’s not to say that any of these things will be true with all companies — they are just issues I’ve run into.

Also, what constitutes “large”? I have no idea. In recent discussions with and about property management companies, the “large” ones have had between 1,000-1,400 properties managed at one time. Does that mean a 500-property company isn’t large? I don’t know. Use your judgment to decide what is large based on your individual managers and smaller companies having, say, 100 or less properties to manage at once. An individual may only have 10 properties to manage! So, gauge for yourself.

Related: The Biggest Lie Investors Are Told About Property Management

Remember (I’m saying this twice for emphasis), nothing in these lists pertains to all companies! I’m sure phenomenal large property management companies exist, and they would in this case be the exception to what I’m about to put out as a “cons” list. So look at these lists as more like “greater chance of” — both for the pros and the cons.


Pros of Large Property Management Companies

Built-in Structure & Systems

I can only assume all large property management companies do have some level of structure and systems. How else would they manage 1,000 properties? They wouldn’t — they never would have made it to that number in the first place. Now, that’s not to say the structure or system is good, but something exists. It may actually be a phenomenal one. But having structure and systems in place is definitely a positive.


Anytime you have large quantities of anything, you have a better chance of getting things cheaper. In the case of a property management company, having 1,000 or more properties likely means they either give particular contractors a ton of consistent work or they can afford to have in-house contractors. Most times a company is given consistent work of decent scale, they lower their fees.

So if one plumbing company gets the calls for all plumbing issues of the 1,000 properties, they are probably going to not charge an arm and a leg. They want the repeat business, and ultimately repeat business is what keeps companies in business. Or with the property managers themselves, they might be able to charge a lower monthly fee to the owners of the properties because they have so many properties they manage that they can entice owners with lower fees and ultimately draw more in.


It’s already happened. This one is huge (I’ll get to why in the “cons” section of the individual property manager). You know what you are getting with a large property management company. A smaller company or an individual property manager may grow significantly in the time they manage your properties, and not everybody weathers growing pains well.

A large company already has this one in the bag. As mentioned before, they already have their structure and systems in place. Sure, they may add improvements along the way, but the bulk of the growing is done already. You don’t have to worry about your arrangement or setup with them changing drastically. It is what it is when it begins.


If there are a lot of employees working in a company, it’s going to be a lot harder for one person to get away with something ridiculous. There are probably bosses and managers, systems in place, and rules for employees to follow. Sure, someone could sneak something around everyone, I’m sure. But for the most part, that structure of the company keeps things flowing so there’s not a lot of wiggle room for how your property is managed.


Cons of Large Property Management Companies


Nothing is worse than not being able to get information about one of your properties! In my experience with large property management companies, I’ve not been able to either get the same person on the phone twice or get information from the one person I do talk to. Getting a different person on the phone every time makes for extremely inefficient question-answering. Or you get the same secretary on the phone, but she hasn’t a clue  and swears she’s trying to get the info, but you continue to not hear back from her.

Think about it. These guys are managing 1,000 properties, and you need information on just one. You can probably see how much potential for information getting lost in translation there is. Nobody knows what is happening with your particular property off the top of their heads, so they are reliant on either finding the information in their “system” (good luck with that) or finding someone who does know the answer. It’s just not feasible for a company this size to be so closely tied into your properties that they know everything immediately or can even answer your calls directly. Shoot me now.


Speaking of not being able to get VIP service on your single little property, your property is basically going to enter the “system” when it needs anything. Maintenance, tenant calls, problems, etc. This isn’t bad if the company’s system is fantastic, but that’s just not always the case.

Efficiency will be dependent on the company’s systems and processes and the availability of the employees or contractors necessary to fix the problem. And tying efficiency back to communication, how efficiently are you able to get answers or responses to your questions or inquiries? So efficiency covers a lot of ground.

Related: The 5 Levels of Property Management Expertise


As I mentioned briefly in the “accountability” section in the last sentence — “wiggle room for how your property is managed” — if you have particular preferences for how you would like the management of your property to go, you may not have a lot of negotiating room with the bigger companies. They have necessary processes in place to be able to manage so many properties, and even if they want to, they may not be able to accommodate special requests that fall outside their established processes. Can you imagine 1,000 special requests? It’s not feasible. There may be some budge room, and some companies may offer different package options, but there’s a good chance a large company can only deviate so far.

Are you getting a good idea of the large property management companies? Great, now let’s move onto the individual property managers.


Individual Property Managers

An individual property manager could mean two things:

  1. An actual individual who is maybe a real estate agent or does something else in real estate to have the knowledge (and licensing, if applicable) to do property management. Maybe he takes on properties just through referrals or some other small network. He likely has an additional stream of income from some other gig because small-scale property management doesn’t pay much. He may only manage a handful of properties — probably not more than 20 or 30.
  2. A small property management company, likely having only one actual property manager and maybe one or two secretaries and a go-to handyman. So a little more company-like than the individual, but technically, he’s still an individual manager. He can probably handle more than 20 or 30 properties — maybe closer to 100. Maybe he has systems in place, maybe not, or maybe they are just extremely basic and simple.

For intents and purposes of the points at hand, I’ll continue to call both of those “the individual property manager.” But know that it may pertain to a very small company as well.

Pros of Individual Property Managers


Yay for communication! This is my favorite part about individual property managers. Are you ready for it? Can you handle this? Hang onto your seats. I can most likely call this manager directly on his cell phone, and he might even answer! Yes, you heard it, friends. What’s better than being able to call your property manager directly and him answer the phone?

He is very likely to know the answer to any question you have about one of your properties right off the top of his head. I know, right? It’s like I’m talking crazy-talk now. Hands down, no question, communication ability with individual property managers is my absolutely favorite pro about them. I’ve notoriously gone with individual managers simply because the same person will answer my call every single time and be able to tell me the answer to my question.


On more than one occasion with individual property managers, I’ve requested something outside of their normal processes, and they were happy and able to oblige. Individual managers don’t necessarily have or need set, strict systems in place because they can manage all of the properties by hand without them. Therefore, they can usually be pretty flexible to tailor things for what you need.

Now, don’t get crazy on someone and make all sorts of ridiculous demands, but little details here and there aren’t usually a big problem. For instance, when I moved to California, I needed the statements for my rental back home to contain certain information because my company was reimbursing me for the fees, and they needed a certain template. My individual property manager at the time was happy to adjust and provide what I needed.


Related: Why I Fired Property Management — And Began to Manage My Own Investments

Either a Pro or Con With Individual Property Managers


This one could go either way with individual property managers — either pro or con. I would vote that more often, it becomes a pro because when a property manager isn’t distracted with 999 other properties, the manager can get necessary things done for it very quickly. In some cases, though, efficiency could be a con with the individual property manager because it’s possible he doesn’t have the man-power for it.


Also possibly going either the pro route or the con route is who can save you more money. I’ve had the experience where the individual has killer contacts in the industry that he knows personally who can come out and do work for you cheaply. On the flip side, because the individual property manager can’t give a handyman or contractor work on as big of a scale as the bigger companies can, they may not be able to get the same lower rates. So, this one could go either way.

Cons of Individual Property Managers


There’s not really any. An individual can change business or do what they want with no major threat of repercussion. As in, they don’t have a boss to fire them or manager to tell at them what to do. Obviously, they can’t do totally crazy things outside of contracts or whatever, but things don’t always have to fit a certain standard. If things are great in the beginning but start going downhill, there’s not much you can do about that (like call the boss and complain).


This one bit me hard last year. I had an individual property manager on my properties who I loved for years. His communication was great, everything was smooth and efficient, he saved me lots of money, and I could always get him on his cell phone — until I couldn’t. With no warning, things seemed to change. I had some problems, and when I talked to him on the phone, he explained that he had grown so much that he was experiencing some growing pains and not to worry — all would get fixed.

Well, I naively believed him for just shy of a year before I finally believed the bad feeling in my stomach and paid a friend (I’m a long-distance owner) to run by all of my properties and let me know how they were doing. The first property he went to was so severely damaged by smoke inside that I went ballistic. I should have believed the communication problem when it happened and taken that to mean other bad things were happening.


This manager placed such a bad tenant in my nicest rental property that the entire property had major damage to it — and the manager had no clue! I would say this is an example of what can really go wrong with growing pains. The manager didn’t know how to grow a business, so things started getting sloppy. That would be OK if he didn’t convert in the process. Somewhere down the line, he had gone from this amazing, nice and friendly manager who I had met on several occasions to this monster who wouldn’t answer my calls, tell me anything about my properties, and had no idea one of my properties had basically been set on fire thanks to a very obviously horrible tenant he had placed. To this day, I have no idea whatever happened with that manager to make him do such a 180. But there was no accountability, and he had no idea how to grow a business. It happened so slowly that I never saw it coming.

OK, all is said and done now! How are my lists? Do you guys agree with them or have any edits to them? I’m all ears. Let’s band together and try to decipher this property management thing. Obviously, I haven’t figured it out because I’ve been through enough to compare them all. Right now, I’ve found a couple companies I’m going with who are kind of in between the large property management companies and the individual property manager. They have systems in place, they are established (meaning no major growth coming), resources in place (handymen, contractors, etc.), but they cap how many properties they do so they stay more boutique-style. So, in theory, I’ll get the all the benefits that I’d get from both a large company and an individual. Well, we’ll see how true it turns out to be. I may have to do an addendum to this article down the road!

Investors: Do you prefer large property management companies or smaller ones? What has been your experience thus far?

Give your thoughts and tips!

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. Ryan Dossey

    I would ask them what kind of software they’re using to manage everything. That can make a world of difference. A large company can be more efficient than a one man shop if they’re running the proper applications.

    You touched on it… But I’d also find out if they make money on repairs to your properties or pass the savings on to you. A larger company may have the ability to pass on the savings. Where if your PM is also your contractor, attorney, leasing agent, and inspector… Not so much.

    • Ali Boone

      All good points, Ryan.

      For the software, absolutely. I will say I’ve yet to have really seen any software (or at least the statements) that I like. Have you had good experience with any? So far the problem I run into with any PM software is it just can’t account for every situation so things are constantly getting left out or mislabeled or something incredibly confusing.

      Agreed on the fees too.

  2. aaron cullen

    Thanks Ali. Great topic!
    I can share my short investing experience. I have 8 units and all are managed by an individual property manager that has one employee, they manage 50units. My PM also has a general contracting business where he makes most of his money. I used him for contracting first then decided to give him a shot with managing my properties. Pros – I can always get him on the phone like you said and he knows everything about my properties. He usually goes out of the way to make sure what ever i need is taken care of. Sounds great right? Cons – I soon realized if I have a renovation project on a unit that is going over schedule I can’t call my property manager to go check it out see what’s up. They are the same person. If you are doing major renovation in my opinion this is a must that you go with two separate companies so one can check on the others work if you are an out of area invester. I’ve also experienced no real system in place for rent being paid so I get at all different times of the month which is a pain if you are trying to scale and build systems yourself.
    Thanks for the post!

    • Ali Boone

      Hahahaha, Aaron, great point about having two separate folks! I hadn’t thought of it that way, but I just experienced a very similar situation. One of my tenants…more or less lit my property on fire…and the (individual) PM was acting as project manager for the contractors to come in and fix it. Details aside, I got utterly and completely boned. Which is unfortunate because I really liked him as a PM and I thought he did a great job, but he was so sketchy with controlling the rehab that there was no choice but to part ways. Like I said, never thought of it how you said it, but that’s very valid!

  3. Jordan Sangalang

    Glad I came across this post. I was wondering what the difference was between an individual or a company running property management. Currently, my property management is by an individual. These pros and cons are something for me to consider in the future when I expand my portfolio of rentals. Thanks posting this!

  4. dennis tierney

    I am using a large co. that manages in 7 states and manages over 14,000 apartment units. They have a good facilities repair department and do a good job of getting multiple bids for something they don’t handle but I find their administrative costs to be very burdensome and strangles cash flow.

    • Ali Boone

      Hmmmm, Dennis. Do they do a really good job with everything and keep you stress at zero? Sometimes paying more, and cutting into cash flow, is worth it for that. But certainly if you aren’t totally stress-free, the extra money may not be worth it.

  5. Matt R.

    Ali, I don’t get your blogs anymore. For the first few years you always mentioned how you spent 5 mins per month on this stuff and always 100% passive money in your sleep type income. Now it seems this is some ongoing problem top to bottom with many issues for multiple properties and very time consuming. Honestly, which is it?
    I can understand either way for sure but what is actually going here now? Is turnkey passive or not? Idk what to think….

    • Ali Boone

      It’s okay Matt. I’m sure you won’t lose any sleep over my article stressing you out. If you did, you’d have stopped reading them a long time ago… since you’ve never liked much of anything I’ve written and you usually disagree or try to find ways to call me on something. I’ve found life is more enjoyable when I just avoid reading things from authors I don’t agree with, but maybe that’s just me 🙂

      But to respond, because it’s a valid question (aside from the negative connotation)…

      No investment strategy (at least with real property) is 100% hands-off. I can’t imagine I specified that anywhere (even spending 5 minutes a month makes it not 100% hands-off). Turnkeys are more accurately ‘more’ hands-off than most, and the goal is for them to be as hands-off as possible. Even if there are problems with them down the road, they are still usually extremely more passive than most. Plus property management issues are completely separate from turnkey-specific anything…it just happens to be that turnkeys use property managers. If that makes sense.

      Yes I’ve had property management issues, but those don’t take up much time at all. Normally I don’t even spend 5 minutes per month on my properties….it’s probably more like 5 minutes per year. During a property management stress, it probably ups me to maybe…two hours per year at most? Maybe 3 or 4 if things get really crazy. The most work I’ve ever had to do on my turnkeys is hire and fire property managers.

      Now, I do have a non-turnkey on the other hand that I happen to be in Atlanta right now dealing with. I’ve never had a rehab issue with my turnkeys like I’m having on this one because the turnkeys are all freshly and nicely rehabbed. My non-turnkey was not, and here I am spending an inordinate amount of time getting it to where it needs to be. I keep getting delayed getting back to LA, dealing with contractors is a gigantic pain and getting the house where I want it is completely unpleasant, and I’m missing out on my entire life in LA for about two weeks because of it.

      So if more than 5 minutes a month knocks a property out of ‘passive’ status for you, well then I don’t know what to tell you. I’ll still take them all day long over these other ones I have to spend a ton of time on.

  6. Matt R.

    To answer the blog title question directly. It really does not matter. Learn how to self manage first and that way you will know exactly how to manage a manager large or small. Until then, you might be spinning your wheels. Especially if you have just a handful of homes. Now if you are in a big city and in an above average area there will be many quality PMs options readily available. This is a business and should be treated as such. Otherwise get ready to pay out extra and needlessly for the life of ownership of that home is the most common experience it appears.

    • Ali Boone

      There are plenty who will argue that everyone should self-manage their properties first, but I don’t agree. I can definitely say that every mistake I’ve made with property managers has had absolutely nothing to do with details of managing a property, and everything to do with knowing how to manage people…in the same way business owners have to know how to manage employees. I could probably list out every mistake I’ve made and not one of them would have to do with day-to-day landlord minutia.

  7. Chris Kirk

    Another great article, Ali! Thanks for all of your insight. I wrote a blog post that goes into a little more detail for how I think about property management companies and how it relates to your thoughts! https://blog.livechalet.com/chalet-a-big-small-property-management-company-317563dcccf7#.t9gpao99l

    Overall I think you really nailed it though. But appreciate how you qualified your statements, because there is no hard and fast rule, some companies (both big and small) will have those issues and some won’t. In general, you are totally right! Thanks for sharing!

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