I am not very happy with my existing PM, and I've made up my mind that I'd replace them. I've found a replacement that I am comfortable with.
Per the existing contract, I must provide a 2 months notice to the PM, unless if the property is being sold. I have one tenant that is moving out soon, should I wait until the vacating tenant be properly serviced before I rock the boat? I am worried if there will be issues related to the final assessment and the fairness of the security deposit return.
What are the steps that need to be considered while replacing an existing PM to ensure the smoothest transition ?
I can imagine at least I'd need to:
1. Replace all the door locks.
2. Transfer the utility bills.
3. Backup all invoices and statements from the PM website/portal.
4. Inform my tenants about the transition.
What else? Any advice from past experience?
may I do a self bump? I'd love to hear about your experience in switching property managers.
I'm also interested to see any input people have on the subject. I've never switched PM companies before, but may have to replace one some time soon! Maybe @Chris Clothier can take this opportunity to drop the knowledge? He runs a very successful PM/Turnkey business and I'm sure he's in the position to offer some great insight from PLENTY of experience.
Since you have to give 60 days' notice, you should probably go ahead and cancel your agreement with them now. Yes, do all the things you listed, plus if you don't have a copy of the rental app and lease from the current tenants, get a copy. Even if everything goes smoothly and the current people move out, you should have their info just in case you need to give a reference or something else comes up.
Also, please deal directly with your current PM when doing the transfer. Don't ask the new PM to deal with it. I have been in that situation and it is very uncomfortable for the new PM.
I would suggest actively involving your new PM in the transition process. The proper handling of security deposits and utility accounts is crucial to a successful transition. Your new PM should take the lead on this to make sure everything is done to their standard.
I was just retained to replace a PM on a 10-unit portfolio and plan to have a meeting with the current PM and owner so that everyone understands the expectations and critical deliverables. I have also structured my engagement so that there is a no-charge 30-day overlap between my contract and the current PM's, so that we are both actively engaged in the transition.
No reason for this to be a difficult process, as long as you set the expectations for all parties and hold your new PM accountable for getting things right. The new PM should be just as vested as you in getting this done right.
Good luck, and keep us posted.
@Mehran K. thanks for the replies. I guess the consensus is to deal with it sooner than later, huh? I'd have to involve the new PM because I am out of state, and I'd rather not fly over there if I don't have to. The problem is that the performance of the current PM is below par, including in communication. I really doubt that the transition will go very smoothly, but I guess I'd just have to deal with it sooner than later.
I just inquire with the existing PM that final inspection and security deposit return is a 30 day process with them! Boy...
Do you think it's better to wait until the dust settles down, or to bite the bullet and try to get the ball rolling with the PM replacement? I hate waiting, but I hate the risk that they are screwing around with this transition period too.
@Ezra Nugroho - If you feel the new Property management company will handle communication better, then inquire with them how they will handle the transition. Anytime we have a property or a portfolio of properties transferring to our company, it is really our responsibility to get everything handled smoothly and efficiently. They should have a process already in place that they use to contact your old property management company for transfer of all monies, leases and keys.
I would have the new management company change the locks for you and personally hand them to the tenant. If one of the properties is vacant, they can change the locks and begin to market it or address any issues. Utilities will probably need to be transferred into your name (at least that is the way it is handled in Memphis and Texas with our company) and most likely the PM company cannot do that for you. The utility may require you to call them so be prepared for that. As for statements and invoices, if you have a property portal then hopefully you can do this on your own without having to wait for the PM company.
I think you are already prepared for the difficulty this could cause for you. Most of the time, when transitions occur, tenants find an excuse to not pay or slow pay. Often times, leases are broken and tenants move out during these periods. Some PM companies make it difficult for you as an owner (not always on purpose but it is just a consequence of them not being very good at their jobs). The best thing you can do is communicate as much as possible with your new property management company and assist them with getting what you need from the old company. It may cost you some headache and dollars right now, but hopefully it will lead to a smoother and more consistent investment experience after you make the switch.
Best of luck and ask any more specific questions on here if you need help. Thanks to @Mehran K. for calling me into the convo. I apologize for taking a couple of days to get back to you. - Chris
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