Looking for positive stories about property managers...

32 Replies

I spend a lot of time in the forums, and have read lots of negative stories about property managers. I'm looking for PM stories where they did what they said they were going to do, or went above and beyond.

I know @Ali Boone is 100% remote, turnkey and has had good experiences. How did you find your PM?

Mindy Jensen, Real Estate Agent in CO (#FA100049656)

@Mindy Jensen Do you want to hear from property managers with a positive attitude and who are property managers to help other people? (:

I’m on my third property manager for some properties I own in NC and think I may have finally found a good one. He claims to visit each of his properties quarterly. That seems ambitious but even if he can get into them semiannually he will be light years ahead of the others. He took over two vacant units this summer and got them cleaned up and rented in less than two weeks. One had been vacant for 5 months. Recently, he had an issue with a tenant he placed that wanted to withhold rent because repairs were not happening fast enough for him. Turns out to be the tenants fault for not reporting the issues in a timely manner in the first place. Rather than stick me with the problem, the PM negotiated with the tenant and agreed to forego his commission for that month to appease the tenant and keep both the tenant and me happy. That was definitely a first for me and I couldn’t be more impressed.

I also switched PMs in FL too last year and the new one has been much better dealing with a difficult property and tenants. I won’t say we haven’t had our issues but it has been markedly better than the last PM. Currently they are helping me renovate and unload that property. I have been extremely pleased with their efforts so far but will reserve judgement until this deal is complete. If they pull it off satisfactorily, though, I would definitely recommend them to anyone and everyone.

In fact, these kinds of performances make me want to buy more in those areas because good PMs are so hard to find. They are out there, though, so when you find them, keep them.

Ed

Good luck, that might be as rare as unicorn sightings! :)

@Mindy Jensen I think Ali has shared some pretty negative PM experiences too. Back to back evictions, neglected properties, long vacancies, going thru multiple PMs and more. I think there are extra challenges if you just have a handful of properties and expect to get the best consistant management. I have heard anything with less than 100 doors it is a bit of a hit or miss across the board. 

Small portfolio holders should be ready to self manage at a moments notice might be a good back up plan. I know one I self managed and sold, when I did some follow up it was was with the "best PM" today and five months vacant for less rent. I think some small time landlords tend to fall in the cracks with many PMs more often than not. I also think some remote LLs must end up with more challenging properties due to lack of local knowledge as the horror stories for those seem to be common place. Hopefully Ali is all kosher now but many folks might consider back up plans in place to play it safe. 

@Mindy Jensen Well as a former preschool teacher and administrator, I got involved in property management to help people. The stigma of property management and managers made me very intrigued by the business.  Granted, I have an investors mindset, however; the importance of building a positive rapport (this is for the managers and owners) is essential. I also think it is possible to talk to eachother in a fairly regular basis, so that when there is a problem or dilemma it isn't 'uncomfortable.' Like every business, communication is the most important aspect while dealing with management services. Lastly, setting expectations is extremely important as well. This should be done in a clear and consice manner from the beginning. Hope this helps and any more questions message me!

Hey Mindy! Well, I have had good experiences, but I've had the bad also. With property management, there will always be some of those unfortunately (unless you are beyond lucky). My most recent successful property manager I found after searching for a year (literally) and some how ran across him online and vetted him and loved him. That was a few years ago and I'm coming up on time to look for a new manager and will begin the search again. It's not an easy one, but just looking online, asking for referrals from other investors, and knowing what questions to ask....just play the patience game and you are bound to find one you like!

Ali Boone, Real Estate Agent in CA (#01911993)
310-957-2101

Mindy;

There are far more good stories about property managers than bad.  The problem is that the being a property manager is like being the operating officer of a company. The owner is the share holder and the tenants are customers.

If you only judge you PM by economic returns you may be setting your self up for failure. Increase cash flow at the expense of the value of the property is usually the biggest complaint. It looks something like this:

Owner wants more cash flow, PM cuts costs, tenant quality drops, rates drop, maintenance suffers, vacancy increases....REPEAT.  Ultimately the property value declines and the PM is to blame.

I call this a death spiral and many properties fall victim to this. How often have you been shown a deal and told it has been mis-managed or run into the ground by the previous owner?

If you are looking for a good property manager, then for me the first thing that manager should be doing is providing me budget of what to expect. Not the other way around. Once you agree on a budget, then you can fairly assess if the manager is any good and hold them to that budget.

Lastly, property managers like all things come in all shades and varying levels of ability. Much of what they do is not seen by the owners but felt in indirect terms by the overall performance of the property. My experience is that most property managers can do an ok job and that a great manager may only slightly out perform an average manager. A bad manager however will cause you more pain and money than you can imagine. Horror stories are everywhere but talk to the residents when interviewing a manager not the owners. After all its the customer that pays the bill and a happy customer is good business.

I use a property manager for all my properties. 

I have a W2 J.O.B. and so does my wife. Add 2 young kids to the equation and that sums up to NO time so having a good reliable PM was very important.

I asked around and took the advice of people I trusted and I had the same PM for 7 years now with no issues (knock on wood).

What's the secret? Here is what I think are his key differentiators:

  • He has his own maint. crew - this means he doesn't call a plumber to fix a small issue or to replace a garbage disposal unit. It also means I don't pay $60 service fees + parts + extra hourly costs = direct savings!!! 
  • He has a ton of experience (managed thousands of units over the years) => really hard to surprise him.
  • He handles eviction! most PMs will tell you they don't deal with evictions. What's the point in having a PM if they only work for you when it's all good times?!
  • He is a licensed realtor that doesn't believe in full price commission for leasing
  • He takes a FIXED amount per unit/per month. No % off the rent. Most of the time, it's way less than the standard 8%-10% others charge.

He is great with the tenants, on the ball with fixing and not letting the properties rot and  the most important thing that keeps me with him is the fact that he keeps things quite for me. No headaches. 

I told him that unless it's a major expense (we've set a number for threshold) don't bother letting me know in advance (I get to see it on the monthly statement). 

Honestly, I didn't meet with him in 2 year! A few emails, a phone call here and there and that's it.

I guess I got lucky :-)

I am very new to real estate investing and have read enough horror stories about PM, that I thought I would share my experience so far.

Im in northern Wisconsin an have been looking to buy multifamily properties here in Superior. The PM I am using is a real estate agent and a investor in multifamily. They have helped me buy my first 4plex, and are now helping me with a total remodel of each unit in the building. My experience so far has been nothing but positive, maybe I have been lucky.

Originally posted by @Mindy Jensen :

I spend a lot of time in the forums, and have read lots of negative stories about property managers. I'm looking for PM stories where they did what they said they were going to do, or went above and beyond.

I know @Ali Boone is 100% remote, turnkey and has had good experiences. How did you find your PM?

 I like to call out my property manager in Phoenix @Dick Rosen . The guy is great. I actually saw his profile here on biggerpockets and gave him a call before I bought my first investment property. 

He keeps me well informed of whats happening, promptly responds to many of my calls and emails, and goes above and beyond. He is very detailed with all expenses, scanning the actual invoices and always offering multiple options to get a job done. Comparing that with my experience on my other 4 plex in Tucson, it was easy to tell that I found a guy who knew what it took and what was expected.

@Mindy Jensen

I've seen all sorts of property manager/owner relationships, I think the thing that is consistent in the ones that are most successful is an arrangement where each has something to lose if they are not living up to expectations. In the case of a PM, that may mean, losing reputation in a local market or losing on a guaranteed income relationship. 

Basic things like a PM having their own crew, handling the relationship and having experience are hugely beneficial but having real skin in the game helps a ton.

@Mindy Jensen

Great question.  

This gives me a chance to brag about my property management company.  I have been through 7 companies prior to the one I have now.

They do a great job of managing my 93 properties and leave me very little to do.

I rate a property manager in the following manner:  When stuff happens, do they call/email with a cost effective solution already in mind or in motion?  

"Stuff happening" is a part of owning rentals.  Anyone that thinks that they will never have issues has not been in the business long enough.  Most renters are one life event away from not being able to pay their rent.  (Funny thing is I told that to a banker one day when I was walking him through my property management company and he said most home owners are in the same situation.)

I will phrase this another way: I am satisfied when an issue in one of my rentals costs me only a reasonable amount of money and none of my time.

My company does  such a good job they leave me free to do what I have a passion for which is helping other people improve their lives financially.

Chris

This might be a Bay Area thing. I believe our property manager is better than all of the above combined. 5% flat fee of gross rent. No junk fees and no first or half of first month rent crap. 

His company manages over 1,600 units in the Bay Area, and they do a fantastic job. Our tenants love him so do we. He takes care from A-Z. We only approve invoices. I like the guy so much that sometimes I volunteered to help him out such as posting notices and meeting contractors.

He was referred to us by our attorney. I don't know how he has enough time in the day to do all of his work, but he does. Wonderful wonderful guy. 

Originally posted by @Minh Le :

This might be a Bay Area thing. I believe our property manager is better than all of the above combined. 5% flat fee of gross rent. No junk fees and no first or half of first month rent crap. 

His company manages over 1,600 units in the Bay Area, and they do a fantastic job. Our tenants love him so do we. He takes care from A-Z. We only approve invoices. I like the guy so much that sometimes I volunteered to help him out such as posting notices and meeting contractors.

He was referred to us by our attorney. I don't know how he has enough time in the day to do all of his work, but he does. Wonderful wonderful guy. 

Minh,

The 5% is probably more a function of the Bay Area, but it sounds like your guy does a great job for it.  Here in LA I pay 7% for my manager, but people think I am insane for paying so much.  I do think he does a fantastic job and is especially noted for his tenant screening, which I agree with.  I think in most markets where rents are lower you are looking at 8-10% for property management.

@Mindy Jensen

I have started helping people with management of their investments over the past month. I never hired any property managers for my rentals because I thought that with the very few rentals I have I did not need the help; however, I can speak on what I believe makes a great property manager.

I believe that the property management company needs to be intentional about managing their client's investments. This is a business, and with any business comes responsibility. In this field the responsibility is a person's house, commercial property, or multi-family property to name just a few. That means the management involves very valuable assets, which in turn should cause the manager to manage the property with high intent. Without intent and professionalism, an investor gets a "bad property manager."

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Originally posted by @Steve Babiak :

Good luck, that might be as rare as unicorn sightings! :)

 Really?  I'm pretty sure I've seen a unicorn ;-)

I think @Rod Witmond raised the core source to tension in most owner - property manager relationships - their interests are not aligned.

As we grow our portfolio, we are under no illusions of being able to continue to manage it on our own - I have a young son and the whole purpose of the move into real estate was to spend more time with him - and have been looking for a property manager.

Most of the ones we've interviewed, in addition to a monthly stipend, make their money on turn (lease-up fees) and repairs (mark-up on labour and materials).  We did encounter one who charges a percentage of the appraised value of the building.  Of course, maximizing any of these is not in the interest of the owner.  

We tried proposing alternate arrangements where the PM would be rewarded for lease renewals and improved operating efficiency, but none were willing to go there and most were not even interested.

At this point, we've begun grooming an in-house resource as it appears this will be the only way we can get the type of PM which reflects our values.

Originally posted by @Edward B.:

I also switched PMs in FL too last year and the new one has been much better dealing with a difficult property and tenants. I won’t say we haven’t had our issues but it has been markedly better than the last PM. Currently they are helping me renovate and unload that property. I have been extremely pleased with their efforts so far but will reserve judgement until this deal is complete. If they pull it off satisfactorily, though, I would definitely recommend them to anyone and everyone.

Just wanted to close the loop on this one for everyone. Made the decision to do the reno on this property even though numbers I was getting from the PM made it look like it might be breakeven. Some things they were saying led me to believe there might be more upside and I think it was a classic case of under promise, over deliver, which is not a bad thing. Here are the good points:

1) PM kept me well informed of the various options. e.g. Once we started work a rehabber made an offer and the PM was working to get them up to an acceptable price to just dump the property. Ultimately decided to do the work ourselves.

2) Initial quote for renovation was $35k+ but the PM found someone to do it for $25k based on their connections and expertise. Turned out great.

3) During renovations the property generated so much interest the PM was able to revise their rent estimates upward and kept me well informed.

4) Kept the other side (it's a duplex) rented and cashflowing during this process.

5) Rented the property within two weeks of work completion for a phenomenal rate.

6) Sold the property for cash to an investor they work with within 1 month of work being complete and within two weeks of it being rented.

7) From the point I said "go" on the renovations to close ~2.5 months.

There were a lot of opportunities for the PM to gunk this up and/or take advantage of me and I really believe they steered me straight. The work done was good based on the interest in the property and the rent it commanded. And the sales price was more than fair based on the comps with maybe, MAYBE, a slight discount for a quick cash close. I am out of a property that has caused me a lot of headaches over the years and the new investor gets a newly renovated property that is cashflowing well. Rather than take the rehabber's $110k price, with the PM's help, I was able to sell the property for $185k after putting $25k in. Oh yeah, they also ate the cost of the appliances and 10% contractor management fee because they forgot to include them in the initial quote.

Bottom line, I will not be doing any more renovations from afar if I can help it. That is an excruciating process. But I definitely could not have done it without this PM and could not be happier with the result. So if you are looking for a PM in Palm Beach or Broward County, FL, I would definitely recommend you give these guys a try.

Ed

I'm a property manager in central NJ in addition to my regular job. I think communication is key in having a good relationship and that having everything spelled out in your contract is important as well. It holds you both accountable during times where you may disagree. I set out to treat any house I manage the same way I would want my own houses treated and I treat the tenants the same way I would want my family treated. I also believe in keeping things simple. You have to interview your PM and get to know how they operate. Are they professional or do they seem fly by night? Are they organized? Why are they successful?

Also, if you are cycling through PMs that might be a reflection on you more than anything else. Maybe you are doing something wrong. Just a thought.

My property managers have managed my properties for almost 10 years, and to my delight.  I live in Ca. and invest in Texas. Two of my properties had extensive storm damage a few years ago and needed the roofs replaced.  My property manager first and most importantly provided the temporary repair for the Tenants' safety and ability to stay in the home.  He next worked with my insurance agent and his roofing contractor to take care of every single detail resulting in both roofs being replaced, no money out of my pocket and providing me the paperwork to sign.