Why do property managers suck?
Most Popular Reply
Brad LarsenPro Member
Property Manager · San Antonio and Austin, TX · Member since 2016 · 377 posts · 380 votes@Jen Boyd Good morning Jen - It's disappointing to see your troubles and I get exactly where you are coming from. Property Manager has a low barrier of entry and in some states, zero licensing. It makes the good property managers stand out even more.
I would also ask - from a previous post of mine - Are you a "C" Class Landlord?
https://www.biggerpockets.com/forums/52/topics/402...
In the property management industry managing single family and multi family homes, we have classifications for Landlords that is never put on paper and probably never talked about.
This has probably never been published before, so here goes something new.... If you are a Landlord, you may want to read this and see what classification YOU would fall into. If the description fits you - wear it.
If you are subjective about your dealings with your Property Manager, it could help foster a better relationship between you and your property manager getting you better service.
Class "A" Landlord:
- Hires a Property Manager and is glad to pay their fees understanding that they provide a valuable service assisting them in growing an asset.
- Appreciates their systems, procedures, tools, and level of separation they provide from their tenants. They understand their job is often difficult being the punching bag for both sides of a management transaction that can last for years.
- Allows them the flexibility to make tough decisions in a pinch on their behalf. (Spending $505 dollars for an AC repair in July when their spending limit is $500)
- Understands that the Property Manager is not responsible for everything that goes on with the home - to include the weather and the marketplace.
- Is easy to get in touch with and responds well to phone calls, emails, and even texts.
- Realizes that by having a property manager and paying $20/hour (example) - it allows them to find bigger deals and more investments making $2,000/hour for their time.
- These folks are full time, possibly part time investors that have enough capital to back up their investments and truly understand that what they put out in management fees is far outweighed by appreciation and tax breaks. Simple depreciation is a monster and is often overlooked by a lesser class landlord.
Class "B" Landlord:
- Reluctantly hires a Property Manager after some minor effort to shop for the cheapest property manager they can find.
- Second guesses all repair items and laments about not having any money to cover large repairs.
- Often classified as "Reluctant Landlords" for never planning on having a rental home, but being thrust into the realm of owning one by an unexpected relocation.
- Wants two bids for every job in the effort to save $20.00 - not caring if the tenant goes without AC or hot water for several days.
- Does not understand basic accounting and needs constant explanation for what the income / expense statement means.
- Is difficult to reach often not responding same day for urgent matters.
- These folks are often reluctant landlords, first time landlords, and intermediate landlords away for a year or two then moving back into their home.
Class "C" Landlord:
- Grudgingly hires a Property Manager because their CPA told them to do so.
- Shops high and low for the cheapest property manager in town - then asks them for a discount because they are an "investor"..... with their two homes.
- Is abusive to the property management staff requiring constant communication and taking the attitude "Don't you know who I am?".
- Introduces themselves to the tenant behind the Property Managers back - telling the tenant they can call them anytime if the Property Manager does not immediately answer their every need. (This creates a Mommy / Daddy issue. The PM says "NO - You can't pay your rent late this month"....then the tenant runs to the Landlord telling them the PM said "We are evicting you AND taking away your birthday")
- Wants three bids for EVERY repair - no matter the inconvenience to the tenant - no matter the headache to the property manager...all with the effort to save $5.00. (Sounds dramatic - but this is true!!! - seen it many times before!)
- Blames the Property Manager for wind, hail, storms, tornadoes, winter storms, freezing pipes, foundation movement, dead grass, etc... Essentially, nothing is ever beyond anyone's control - it's always the PM's fault. This is a deeper reflection of that type of person never taking accountability for anything.
- Wants to sue everybody for....everything. Tenant did not water the grass last week, can we hire an attorney and sue them? You did not answer the phone on a Saturday, if you don't call me back and I will seek vengeance on you with my attorney!
- Leaves negative reviews on line about a property manager. Hides behind Google and Yelp to feel better about their cyber bullying. If the landlord truly had a real issue - almost all property management companies are governed by several entities to include the state. Threatening to leave a negative review if you don't get your way is blackmail and extortion. Same tactic the mafia has used for years....no different. If the Landlord has a real issue with the property manager - point 7 above may be needed. Leaving negative reviews on public forums is not productive for anyone.
- Is impossible to reach via phone / email. Then they respond at 10:00PM on a Saturday and is upset no one is available to speak with them at the time they finally call back.
- Will not reduce asking price in rent. If a home is vacant - with good marketing photos (and video) - and is being advertised fully.....here is a hint: IT'S THE ASKING PRICE! There are two things that rent homes - Price and Condition....and Price can make up for everything. The Landlord not willing to reduce their asking price at any cost is a flat out moron. If you want to do the math - assume your property rents for $1,000 a month. But, you aren't getting it. What do you lose every month that the home is not rented? That's right - $1,000. What do you lose every month if the home rents for $950? Well done - $50 / month or $600 a year. Which would you choose?
- Wants to do their own repairs. We have seen time and time again owners taking 6 months to do their own make ready repairs spending several thousand dollars MORE to do it and losing 4-5 months in possible rent. I have seen the total swing to be $10,000 with several investors....all one can do is shake their heads at them.
- These folks are often first time investors, overly dramatic reluctant landlords, emotionally attached to their homes and in often cases have a "I'm smarter and better than anyone else in the entire universe and I can do it all" attitude.
Ask yourself - which type of Landlord are you?
61 Replies
- Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes9y
Hey @Jay Hinrichs I value your opinion. Below are a couple of expectations that may quantify items. Let me know if any of them are unreasonable. This will get tougher to address over a post and I am more flexible than these will appear when core functionality is working.
No fraud
Rent due on the 1st, late after the 5th, eviction filing on the 10th (or something similar as long as it is consistent)
Resident screening to include prior eviction, criminal background, prior landlord, credit and appropriate income/rent level
Management of maintenance and contractor depth to handle their portfolio
Renovated units turned within 5 business days (industry standard is 3)
Un-renovated units turned within 10 business days (SLA with PM based on the limited level of work that is being done...flooring, paint, lighting)
Vacancies filled within one of month of resident move out (SLA with PM as well)
I am running out of time to post today; so, I just quickly typed up the items above. My prior PMs have struggled with the basic functions and unfortunately my family has had to step in when contractors were paid for work not completed, units in prime locations were vacant for three months, 25% of rents were not collected during the month due to improper communication with residents...I could go on.
I am paying $45/hr for in-house maintenance now plus 15% markup on 3rd party vendors in addition to the management fee; so, compensation has not been problematic.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Mike Dymski agree in a perfect world this should work.. but you have 3rd party man power you cannot control when someone does not show up. your time lines are just not reality unfortunately.
even my guys that own 200 plus units and self manage can't get it done with that type of efficiency .
everyone wish's they could but its simply not reality.. and especially if you have section 8 inspections added in.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Mike Dymski although I will say in our current rental environment here in Portlandia which is basically 1% vacancy and little to no section 8 and 50 applicants all 700 plus ficos per home LOL you can get pretty close to what you wish
- Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes9y
@Jay Hinrichs thanks for the feedback and I will continue to work with my new PM on our service level time frames.
This is an apartment complex too versus SFRs spread out.
2 local maintenance guys who immediately respond to calls (new PM is using in-house maintenance profit center)
3rd party vendors have been great...large regional companies who provide service with 24 hour notice.
No section 8
Vacancy is very low in my market as well
Not looking for perfection and have a lot of management inefficiency built in to financials. Just want to be able to keep the property long term.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Mike Dymski OK apartments are totally different I am talking SFR's .. managing SFR vs apartments is apples to Iceberg lettuce..
my clients and or friends that have bigger units here in PDX enjoy completely different level of service first off.. they have what I call true professional managers IE company with 6 thousand doors in 3 or 4 states. Owner of company is pretty hands on and quite successful himself .
on site manager turnover teams in place etc etc.. given this your time lines for a multi are not out of line ... for SFR for sure just can't happen.. and most folks I think are talking SFR at least from what I see.. most folks with Multi you don't see the PM complaints near as much.. different managers
- Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes9y
Most the multis in LA are property managed very well from what I have seen. Top to bottom full service. Some can do it all even into total redevelop. Trying to get the same professional service on a couple sfrs renting sub 1000 is maybe not a realistic long term plan. It could be an everyone loses deal for some of those. Many homes were never meant to make any real significant money lets face it. Volume or self manage are likely more realistic business plans for many of the cheaper sfrs if you want those type of "investments."
- Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes9y
Agree with others that the post from @Brad Larsen is spot on! I'm not a property manager, but I think that as an investor the first step in finding a great PM and having a great relationship is to treat them how you would like to be treated. Be responsive, professional, reasonable and easy to work with, and only then is it fair to expect the same from them.
I see the attitude of "I can't believe I'm spending $X on PM fees!" but I'm not sure those people are valuing their time or energy. I've done the math multiple times from when I was briefly self-managing, and it is totally worth the $75-$100/month for the time savings and peace of mind.
Anyways, to answer the OP, why do (some) PM's suck? I think it is a hard, thankless job, and it's hard for them to find and keep competent people on their staff. Also, there is a constant back and forth between keeping both the tenants and owners happy. I think that is a unique conflict that doesn't exist in any other business. Who is really their customer...the tenant or the owner? They get paid when the tenant pays their rent...but they need to keep the owner happy enough so that the owner keeps using them.
Good/proactive PM's want to find and keep good tenants in place who aren't going to be calling them once a week...less headaches/time required and more consistent cash flow for them...which is what YOU want as the investor as well, right?!
I have largely been happy with my PM's. But I set the expectations up front on what I expected out of the relationship, and I invest a few minutes every other month or so to check in with them.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes9y
The title question here is pretty funny.
I suppose it's same reason that contractors can suck or about any other profession. Apathy and/or incompetence. Don't care and/or don't know any better.
Look at the requirements to be a PM. A RE license? That's rich. I took that stupid test. Knowing RESPA or agency disclosure or the square footage of an acre does not help running rentals.
Get one that came up in the trenches of their own rentals. Get one that HAS their own rentals. Get one that doesn't need to pay a leasing agent a commission. Get one that actually asks a clarifiying question or two when a repair request comes in instead of immediately sending out the maytag man at $100/min. With an upcharge. The same ol' same 'ol will give you mediocrity at best.
Manage yourself if the property is in your backyard or quit whining. If you don't want to get your little hands dirty, it's on you. Passive income does not meet passive investment.
- Murfreesboro, TN · Member since 2012 · 2 posts · 0 votes9yYou have to make sure they are working for you. Meaning when you call them they respond to you in a timely manner because that's what you pay them for. A good PM will already have the best maintenance personnel ready to deploy once a issue arises at your property. If you only have 1-3 property's you can do it yourself no problem. I've wasted $12,000 over the past using a PM and I'm the one always either fixing it because it's something simple. I'm going to put it to you like this...time vs. money? Which one do you prefer when it comes to doing it yourself (time which has no $ associated with it) or money (pay a reasonable pro to do it for you so you can save time).
- Real Estate Agent · Jacksonville, FL · Member since 2015 · 1k+ posts · 1k+ votes9y
Can anyone recommend a good mechanic Dentist, hair stylist, etc.
It is your job as the investor to seek out a quality team. There are a lot of property managers out there, the barrier to entry is low. Put our a sign and you are in business. I do not believe there is regulation in this area. The other challenge is for them to profitable, they need scale.
If you perform your due diligence and ask around you can find quality. I am my own property manger, mostly for tax reasons. A number of the investors I work with use the same PM. I have been recommending them for years. It has allowed them to be investors and not landlords
- 9yPeter TverdovBusiness MemberDeveloper · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
I can speak from a property manager perspective. I wear many hats, but I truly enjoy Landlording and so I got my realtors license to become a property manager and shaped my business from reading through this site for the most part. I do not advertise (aside from CL) and have a small group of clients in Central NJ that I am looking to grow. I work very hard to place fantastic tenants because I do not want any headaches and I do not want my owner to be unhappy. I am very picky and particular with this (including the owners that I work for, some are crazy and incredibly cheap and therefore not worth my time). I am quick to communicate with tenants regarding any issue and communicate with my owners whenever I feel they need to be notified of something. I am very organized, keep things simple, don't mark up on repairs, etc and just have a passion for it. I decided to do this because my area needs good PMs.
You should be able to tell if you're dealing with someone good. I get people who ask me how many doors I manage (as if that DQs me from managing their 4 plex or SFH). Hire someone hungry, someone who communicates well, has plenty of vendors ready in their phone and is organized. That's what works for me and my owners love me.
- Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes9yI work with two property managers. The first, I pay $2 a day to manage the day to day dealings with tenants on one rental AND her crew is helping get the other house marketed. That's cheap labor! Would you work for $2 per day? I wouldn't. The second I pay $2.42 per day to manage the day to day dealings with a tenant. Again, I wouldn't (and don't) work for that small amount of money. My time is worth much more than that. My property managers are awesome. By contrast, I work out with a personal trainer twice a week. He charges me $140/hour through the health club I belong to.
- Investor · Germantown, TN · Member since 2017 · 1 post · 0 votes9y
It's all but impossible to provide high-quality property management services on 8% - 12% collected rent approach (which is the general SFH property management approach). Next, there are many ad-hoc property management companies that simply are developed and exist as a means to manage investor-owner properties and pull money off of distressed and ill-informed landlords, and third, a lack of resources and financing - lack of business planning and ability to execute are common in the property management industry. Next, it's often challenging to provide quality services to overly price sensitive consumers - that's just fact. The majority of investors are novice investors that come and go around real estate booms. The investors generally only seek low-cost from an over-leveraged property. As shared herein, there are good property management companies (to include mine) yet to be successful in property management the service approach must be professional, transparent, and built upon trust by both parties.
- Real Estate Agent · Augusta, GA · Member since 2016 · 50 posts · 28 votes9yThat don't. You deal with the wrong ones.
- Professional · Albuquerque, NM · Member since 2016 · 65 posts · 44 votes9yAs an investor, realtor and owner of a property management company my favorite management clients are the ones that have tried to manage their rentals themselves. Heck, my favorite clients in general are the ones that have tried to manage their own stuff. It's a humbling experience and people who have done it themselves tend to be able to extend a lot more grace than those who haven't.
- Investor · Pryor, OK · Member since 2016 · 33 posts · 3 votes9ySo this is at all of us in RealEstate We Get What We Pay For How do we turn this into some like Brrrr so people can remember it's easier Golden rule ties in somewhere.
- Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes9yThis business owner once told me, "Josh there is no such thing as a bad employee, only bad employers. It is the employers responsibility to vet, choose, and train who he employs."
- Specialist · Red Bank, NJ · Member since 2016 · 34 posts · 19 votes9y
Because there is no money in it!
- Phoenix, AZ · Member since 2016 · 74 posts · 17 votes9yJason Hirko true, but they are the ones who chose to work in property management. And despite the fee or the work, if they decided to do the work, they should show good work ethic and do the job they are paid to do.
- Rental Property Investor · Dallas, TX · Member since 2015 · 501 posts · 504 votes9y
Originally posted by @Kyle McCorkel:
Anyways, to answer the OP, why do (some) PM's suck? I think it is a hard, thankless job, and it's hard for them to find and keep competent people on their staff. Also, there is a constant back and forth between keeping both the tenants and owners happy. I think that is a unique conflict that doesn't exist in any other business. Who is really their customer...the tenant or the owner? They get paid when the tenant pays their rent...but they need to keep the owner happy enough so that the owner keeps using them.
Great point. They have to serve two masters, each with competing interests.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes9y
@Jen Boyd I think you could insert any profession in this sentence, "Why do _____________ suck?" In any profession you will find a percentage that are horrible. I contact small businesses all the time to do work for me. I called five roofing companies to get estimates for roofs last year on my rentals. Three called me back and two never even returned my call. The three that called me took details and said they would put together an estimate. Only two of the three called me back with estimates. I called the third and his voice mail was full. Of those two, only one seemed professional. It was mind blowing, but this is what happens every time I search out people to do work.
Every profession follows the 80/20 rule, which means only 20% of the property managers, landlords, roofing companies, etc. are really good at what they do. The other 80% are non-responsive, lack follow through, do poor quality work, are over priced, etc.
Property managers will have plenty of stories about nightmare owners. Most are unlikely to post them on a public forum, because talking bad about your customers is bad business. Let's be honest, many owners don't maintain their properties or even clean them properly. Some owners try to discriminate. Some owners lack the necessary capital to pay for needed repairs. Many owners have unrealistic expectations and get angry when their crappy overpriced property doesn't rent.
My frustration with property managers is that they don't communicate and my property is one of many, so doesn't get the needed attention. I know eventually I will have to either hire a PM or start my own PM company, but for now I can self manage.
- Investor · Saint Nicolas, Québec · Member since 2016 · 53 posts · 20 votes9y
PM use a flawed system that benefits them everytime but does not befenit the owner all the time.
- Alhambra, CA · Member since 2015 · 142 posts · 78 votes9y
Ceteris paribus, a person's motivation can be determined by how much skin they have in the game.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.