How long should I give a Property Management company?

19 Replies

Hi All, I'm a new landlord with a duplex in Montgomery, AL.  It closed in the last few days of September. Now we're 2 months in, and the 2nd side is still not rented.  I was told market rent was going to be about $650-675.  We've had it down to $625 for the past month and hardly any qualified applicants according to the PM.  A fellow BP friend told me to post in on Facebook Marketplace, and I probably have received about 150 inquiries, and I would send them the info and the link to apply.  The PM still says nothing is coming in.  I'm concerned, and not sure if this is normal, or if I should be interviewing other PMs.  I did get this PM as a reference within BP so I had a certain base level of trust going in.  

Originally posted by @Travis Mullen:

Hi All, I'm a new landlord with a duplex in Montgomery, AL.  It closed in the last few days of September. Now we're 2 months in, and the 2nd side is still not rented.  I was told market rent was going to be about $650-675.  We've had it down to $625 for the past month and hardly any qualified applicants according to the PM.  A fellow BP friend told me to post in on Facebook Marketplace, and I probably have received about 150 inquiries, and I would send them the info and the link to apply.  The PM still says nothing is coming in.  I'm concerned, and not sure if this is normal, or if I should be interviewing other PMs.  I did get this PM as a reference within BP so I had a certain base level of trust going in.  

 Facebook marketplace is pretty junky in my market. Lots of interest but people are flakey or unqualified. I don't even use Facebook any longer. Where does your PM have the property listed? Do they have yard signs? 

@Travis Mullen Some of this could depend on current inventory; how much other competition for like properties in the area. And I agree with @Joe Splitrock, FB marketplace is junk; low quality lurkers on there. I would ask them where they are advertising and to send you a link to the ad so you can make sure the write up and photos look appealing. We like Zillow even though it does cost something, we usually get a good amount of interest from there. Zillow also syndicates to other sites so it will have exposure in other places. I would also ask them how they arrived at the advertised rent amount. If you are two months in with no applicants, it could still be a bit high.  

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Originally posted by @Julie Hartman:

@Travis Mullen Some of this could depend on current inventory; how much other competition for like properties in the area. And I agree with @Joe Splitrock, FB marketplace is junk; low quality lurkers on there. I would ask them where they are advertising and to send you a link to the ad so you can make sure the write up and photos look appealing. We like Zillow even though it does cost something, we usually get a good amount of interest from there. Zillow also syndicates to other sites so it will have exposure in other places. I would also ask them how they arrived at the advertised rent amount. If you are two months in with no applicants, it could still be a bit high.  

 I actually like Zillow MORE now that it costs money. Most landlords are too cheap to spend a few dollars advertising, so I have less competition. It also encourages landlords to take down ads when properties are rented. If the PM is not advertising on Zillow, that would concern me. It tells me they would rather let the property sit vacant than spend a few dollars marketing it. Wrong mindset.

Yes, its on Zillow.  Its on every online platform I've seen.  Pictures look good.  It has all the info.  There are some tougher criteria listed as "Qualifications- 550 minimum credit score, no felonies, no evictions,
clean rental history with a company, must make 3 times the rent a month."  So I dont know if there's just not a lot of people that can meet those requirements.

@Travis Mullen It is the offseason. Rental season is kinda low this time of year. Most of the best applicants move around outside of the school year. Your property may also have some issues, or a specific quirk that tenants hate. Took me 2.5 months to rent a duplex cause the stairs were super steep.
Give them time. But ask for specifics. How many people applied? How many showings did they do? Why do they think it's not renting?

@Joe Splitrock You're right about zillow costing money. Fewer dead listings, and no scammers. Still I won't use their " application"  and I have no sympathy for their i-buying BS.

@Travis Mullen  Dont feel bad - this has been my experience with PMs as well and why I fired them all and self manage.  What you can do while you figure out if you want to fire them,  is "shadow" list the property - just list it on zillow, CL etc and have the folks contact you and you do the showings etc. This will give you a very good idea how bad your PM really is. 

For example my PMs never rented any of my units and I rented them all within a week of listing them for MORE than the PM listed them for. Hence why I fired them...... 

Ive got a couple rentals in one location that basically no one moves from Oct 15th to Jan 10th. If I get a vacancy during that time it is crickets, then come right around Jan 10th, Ill get a bunch of inquiries for a Feb 1 move in. It's been like that in that 1 location for a decade.

@Mary M. that is the #1 WORST advice ever! To start with, it's breach of contract, and promoting people to get "black-balled" by the local pro's right out the gate is idiotic. 

Second, anyone who has a weeks worth of SEO education knows that double listing with conflicting information DESTROYS the web presence because to the underlying systems of the internet, it flags as a scam (same property with different listing contact #'s, posters etc). 

I have ran into similar UBER-novices before, I fire your like and make a point of listing on the "never-serve" because it's all about mindset, your mindset is toxic and focused on leaping over dollars to grab those pennies. And I know, your never wrong, never ever. And ever service is a scam, every retail store a scam, jewelers, scam, new auto dealers, scam..... I have heard it all before and know I nor anyone will ever convince you otherwise, this is for the newer folks who think you actually have more than 3 properties that are not ductape and fleckseal monuments. 

@Travis Mullen if your new to this, and not to sure who your working with or why other than found them on ___ site, than 100% you should be out interviewing EVERYONE doing PM every day non-stop, and trust NOBODY. Those interactions are going to be a major education, your going to hear enough and experience enough where you will start identifying the BS lines and fly-by-night operators. AND with that, the legit ones will stand out more. 

Until you actually know who your working with or why, what's the point of changing? You'd be going from blind shot too blind shot. Let it ride for now and GET EDUCATED, grab the opportunity for positivity. Interview everyone, ask them what they see being done right, and whats being done wrong. Ask what they would do differently. POW, instant value out of a vacant unit. 

After you know how to do PM, that's when you start dabbling. Before that, it's just asking for suffering. I am always happy to share what I do, why I do it that way and how with my clients, I love sharing and educating. And most quickly say nope, over there heads, not for them. So that BS that we fear telling anyone how to do it is laughable. It's hard, really really hard, complicated, detailed, and take years upon years of developing systems to do PM really well. 

The big difference, is the PM have large probability to know the know the REI the market way better than your think or your BFF in BP. He knows who is garbage and how is not. Unfortunately, your property, in my opinion, is well below average rental standard prices, at least for this market. Granted, I do not know specifics of your property, but if you can't rent for $700.... well.

If you can't rent for the asking price, you have two options (In my opinion), since you are new and apparently with no cash to put into the property.  Drop the price and rent, or get rid of it.  (get rid of it meaning sell, do other strategies so you don't loose much $)

Advice, shift your mindset of making $25 less today vs what can you do tomorrow.  You will learn, and taking that $25 hit (or not) will make you grow.  

Now, take the time to scrutinize the 150-200 inquiries from FB and finding a good tenant. Good luck with that.  

Why don't you contact the PM and pretend to be a perspective tenant and see what happens?  Also look at other listings and see how long they have been posted.  Most PM have their own website where they also post places for rent.

Originally posted by @Travis Mullen:

Yes, its on Zillow.  Its on every online platform I've seen.  Pictures look good.  It has all the info.  There are some tougher criteria listed as "Qualifications- 550 minimum credit score, no felonies, no evictions,
clean rental history with a company, must make 3 times the rent a month."  So I dont know if there's just not a lot of people that can meet those requirements.

 This is pretty standard qualifications for a tenant, and trust all of us, you would rather wait a little longer for a well qualified tenant than to get the first semi-OK person in the unit to get the rent checks flowing. I did that once when I self-managed and ended up selling the house to get rid of the problem. To me, it sounds like your PM is doing everything right, it's just your market right now? People don't typically volunteer to move around the holidays, but people do get new jobs, move to be close to an ailing parent, etc. 

There are many reasons why it could be languishing. If your PM is worth their salt, they should be able to easily explain why the unit is not renting.

Posting on Craigslist or Facebook can generate a lot of buzz, but they are typically low-quality renters or lookers that aren't serious. There are a TON of renters that will not work with a PM company because they don't want to be screened or they want to work with a private owner they can manipulate more easily.

Talk to your PM. If they seem to know what they're doing, trust their advice. This is the slowest time of the year.

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Originally posted by @Travis Mullen:

Yes, its on Zillow.  Its on every online platform I've seen.  Pictures look good.  It has all the info.  There are some tougher criteria listed as "Qualifications- 550 minimum credit score, no felonies, no evictions,
clean rental history with a company, must make 3 times the rent a month."  So I dont know if there's just not a lot of people that can meet those requirements.

 In general those are reasonable standards, but for Montgomery AL renting a duplex in the $625 range, you may be aiming too high on standards. Qualification standards need to be appropriate for the location and condition of the property. You can rent it for $400 and may still not be able to attract good people to certain neighborhoods. Does your PM have any sort of condition that people with lower credit scores can apply? Some PM in my area offer "risk mitigation fee" that increases as the credit score decreases. Years ago I rented a duplex in my city and the rent was $600. The only people I could find to rent it had some credit challenges. We leaned heavily on previous landlord references and employment.

What is the PM recommending? Were the qualification standards their choice or yours?

@James Hamling if me getting my units rented black balls me - so be it. I do a better job than a $15/hr desk person who could care less about my multi million $$ assets.  Fwiw, I rented 5 units while the PMS never even had a showing....  and its not like I didnt give them a chance.  But, I didnt destroy anything....  I used different unit numbers.....  and if the PM were to cry to me about breach of contract I would just point them to the fact that they dont do squat.   They did however get paid for ME leasing the units up....so not sure why they would complain???

I am not a rookie, fwiw ;)  and I will absolutely suggest folks take charge of their assets and get lazy PMs working.