11 Problems Only Property Managers Have

by | BiggerPockets.com

Property managers play a unique role in the world, interfacing as we do between real estate investors and tenants, contractors and city officials, home-seekers and real estate agents. Few people get the chance to see the good—and bad!—sides of people from so many different socioeconomic levels, employment types, and motivation levels. The results are often painful—but even more often, in retrospect, hysterical. See how many of these you recognize!

11 Problems Only Property Managers Have

1. The Case of the Non-Present Money

How many times have you seen a tenant rocking a new iPad or even a new car just after Christmas—and then pay late on rent because all of their cash went toward presents for their friends and family? On the one hand, yes, we know that Christmas does actually work that way sometimes, but seriously, don’t you think it would be wise to maybe ask for help paying your rent?

2. The Incredible Transforming Applicant

This is the end result of poor tenant screening—or perfectly good tenant screening with a tiny bit of bad luck. Unfortunately, the only thing you can do once your rock-solid-seeming tenant has turned into a monster is find the most efficient way to cut your losses.


3. The Prodigal Brother’s Dog?

There are a few often-repeated excuses we get when we find a pet in a home that doesn’t have a pet on the lease. The most common of them is, “It’s not mine, but the owner will get back any day now!”—and a complete pile. Pets aren’t allowed without a pet deposit, period. If your brother wants you to watch his dog while he’s on vacation, you call us and you get that pet added to your lease, and you submit a pet deposit. Sorry, Fido!

4. The Case of the Vanishing Social Life

There’s nothing quite like your third or fourth Friday night in a row spent elbow-deep in someone else’s broken plumbing or sputtering heater, especially when your family and friends are patiently waiting for their turn to be the focus of your attention. This is when knowing some trustworthy repairmen can really be helpful.

5. Late Date and Irate

It’s amazing just how many ways a tenant can accidentally show you that they may have more money on hand than their late rent would indicate. The question is, how aggressive do you get in pursuing that late rent? After all, those Amazon boxes may have been paid for several weeks ago and just shipped overseas from China. Right?

6. When You Don’t Even Know

You are about to enter another dimension—a dimension not just of sight or of sound, but of pure inexplicable chaos. This is the Tenant Zone! No, seriously, you don’t even know how much you don’t even know until you walk into a situation you thought made sense over the phone and find that the maintenance issue you thought you could fix with a green scrubby and some WD-40 turns out to be something that the laws of physics cannot explain. Ph’nglui mglw’nafh Cthulhu R’lyeh wgah’nagl fhtagn!

7. Lawyer Money Comes from a Different Wallet

Admittedly, the only real “problem” here is not laughing in the faces of the agitated evictees who throw threats like this at us—but hey, sometimes that’s hard!

8. TFW They Want The Whole Security Deposit Back And…

“Did I say wear and tear? I meant it was like this when I moved in. Honest!”


9. We Didn’t Let You…

Subletting may sound like something that medieval physicians did with a special variety of leech, but it’s actually much, much more disturbing than that—doubly so when your tenant is collecting rent from a tenant of their own and isn’t actually living at their listed address at all!

10. It’s Just an Uncooked Meal

One of the reasons why contract lawyers come at such a premium is that they can, hopefully, prevent situations where a single reasonably-misinterpreted word or phrase can mean the difference between a lease going off OK and a lease going to court and wasting everyone’s time and energy.

11. But I’m Only One Day Late

How is anyone supposed to get the idea that rent is due on the first if you always give them until the fifth before any consequences actually land on their heads? This is why our lease explicitly refers to the grace period as a privilege that can and will get taken away if it’s abused. That way, we never (OK, rarely) end up in this situation.

So, what do you think of our breakdown? Did we miss any commonplace situations that you think would fit in on this list?

Let us know in the comments!

About Author

Drew Sygit

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 designations and joined mortgage & several affiliate association Boards. He also did WebX presentations and public speaking. It was during this time he started personally investing in single-family rentals, leading him to also start Royal Rose Property Management with two partners. He also joined the Board of a local real estate investors association, eventually becoming its President. The real estate crash led to an offer from the banking industry to manage a Michigan bank’s failed bank assets they acquired from the FDIC. The bank acquired four failed banks from the FDIC, increasing from $100M in assets to over $2B while he was there. After that, he took over as President of Royal Rose Property Management. Today, he speaks at national property management conventions and does WebX presentations.


    • Drew Sygit

      @JUSTIN SMITH: Yeah, and that gets ugly when one of the income-earners splits and the remaining one can’t afford the rent on their own, but claims they have nowhere to go and you’re heartless for tossing them and the kids on the street.

  1. Bernie Neyer

    Very entertaining article.

    The bit about the brother’s dog is spot on, sorry for the double entendre, but you need to watch out for other kinds of animals.

    Even though our contract says no pets allowed without a pet agreement and no dogs, cats or exotic animals one tenant claimed to be keeping a rabbit for a family member. I never could catch them with the animal, but did see the hutch.

    Rabbits will eat everything in sight. It ate the carpet and pad, and then the tenant tried to claim the vacuum did it and wanted me to buy a new vacuum claiming the carpet ruined it. After we got her out, we found Pot, which was probably the root of the problems with her.

    We also don’t give any grace period. The rent is due on the first, late on the second with late fees applying. We require them to contact us prior to the first if they are going to be late, and tell us when we will receive the rent. We remind them late fees apply and what they will be if we receive the rent when they say.

    If we haven’t received the rent or been contacted by the second we call them and ask, even leaving voice mail if they don’t answer, asking where the rent was. If they have a valid excuse, death, illness, etc., we can wave the late fees.

    If after all this they haven’t paid the rent or contacted us, we serve the premises with a 3 Day Pay Rent or Quit notice. That usually gets their attention.

    • Drew Sygit

      @SARAH P.: We allow a 5 day Grace Period as we’ve found local judges don’t look favorably on late fees tied to leases with a grace period.

      But… we had a tenant teach us a lesson several years ago when, they argued with us their rent was due on the 5th of the month, not the 1st. When we pointed out the Due Date language on our lease, they replied that since there was no penalty until after the 5th, that their rent was then realistically due by the 5th.

      As we couldn’t argue with their logic, we changed our lease to state that the Grace Period is a revocable benefit. While unfortunately, this means nothing to lower demographic tenants living paycheck-to-paycheck, it has helped curtail late payments with most other tenants when we remind them their Grace Period may be revoked if they consistently pay after the Due Date of the 1st.

  2. Shawn Johnson

    Great article Drew! I’m a fellow PM company owner and understand all of these with personal experience…now my staff does too. I really like your late fee perspective, even though we won’t be changing ours. It’s an interesting take. We have a 0 day grace period and the late fee hits at midnight on the second. I figure they have 30 day prior to figure it out. Once again great article!

  3. Reshawn Lee

    We are full time W-2 investors with 2 property managers. While there is a standard lease agreement in the state of Texas, they have different styles that allow us to learn from them both.

    1. Video the property before the tenant moves in. Make the tenat aware of the video.
    2. If you are managing property for others, encourage the property owner to purchase a home warranty. Fidelity has worked well for us.
    3. Require a large non-refundable surprise pet or subletting fee EX: $2,0000.
    4. Require all leases to end by the 15th of June in order to get a new tenant before school starts.

  4. Joel Gierbolini on

    I am from the Miami area and hopefully soon ill by a multiplex this year. Does anyone know a good property management company in the Orlando and Kissimmee, FL area?

  5. Charles Beaumont

    I am a licensed RE Agent in Atlanta Ga. I have an opportunity to manage a 20 property rental portforlio for an investor. Do I need to have a Brokers License to legally manage the properties or could I act under the license of my Broker? I have my own company established as an LLC and would like to utilize my own business accounts rather than do everything under my Brokers company name etc. Any suggestions or advice would be greatly appreciated as to the best way to structure things. Thank you in advance!

    • Mark Dolfini

      Hi Charles, I’d be REALLY careful about relying on answers on something as important as this in this forum as it COULD threaten your Real Estate license if you don’t get it right (and you definitely don’t want that).

      My recommendation is to contact your Real Estate Licensing Authority and ask them, and ask them where it is in the statute so you have it to reference in case you ever need to. You worked hard for your license, don’t risk getting fined or getting it suspended over something you could easily prevent!

    • Drew Sygit

      @CHARLES BEAUMONT: we agree with Mark’s recommendation.

      We’ll also point out that if you’re going to operate under your Broker’s license:
      1) Get their permission
      2) Confirm their E&O Insurance covers property management
      3) If you’re using their license, you’ll have to use their bank accounts.

  6. NA J Taylor

    In most states, if not all, the grace period is mandated by state law. PMs and landlords do not have the right to take any action against a tenant who did not pay during the grace period. Even if they tried, judges would throw the evictions and maybe even late fees out of court, even if the plaintiffs were not prohibited from taking action by law.

    It is ludicrous and arrogant to think so. How much more important is a home, a roof over your head, than things like a car or credit card or 65″ TV, but no one comes to get them if a payment is a day or two late. And mortgages have grace periods 3 times as long as many rental laws allow.

    Apparently the author doesn’t know what a grace period is. It is BY DEFINITION a period in which there are no consequences. You can write that the sky is green and the grass is blue in a lease if you want to, but that doesn’t change reality. If you or your state or local law state that a grace period exists, you can write all the clauses you want about privilege and revocation, but it isn’t a privilege and the landlord can’t revoke it. Individuals and corporations can’t change legal definitions to suit themselves, and a lease agreement, contract or whatever you want to call it does not override law. Dumb comment. Should have stopped writing after Item 10.

    • Drew Sygit

      @NA J TAYLOR: we only manage in Michigan, which does not have a state law requiring a grace period. So, we can revoke it if our lease states we can.

      Here’s a definition of grace we found online:
      “a period officially allowed for payment of a sum due or for compliance with a law or condition, especially an extended period granted as a special favor.”

      Favors should not be abused and if they are, we should have the right to no longer grant them.

    • Drew Sygit

      @SANDRA BRASWELL: we’ve been told that since the property owner is not an employee of the management company, that they cannot be given access to any applicant info that would violate Federal or State Privacy statutes.

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