Property Management & Their Property Inspection Process

5 Replies

I was talking to one of my RE friends in California and we were discussing the San Bernadino area...Anyway, during that conversation we began talking about Property Managers, and I told him about BP and how so many posters from around the U.S. pretty much have a large consensus that the vast majority of PM companies are sub par.

He said that he has had numerous clients who've indicated they are ready to sell their properties and will tell him that the property is managed by a PM company. He said he'll go to the properties and the properties (by and large) look neglected and are in ill repair with $1,000's of dollars in deferred maintenance items that are obvious. He'll contact the owner and tell them that he doesn't know what they are paying that PM, but they clearly are not/weren't maintaining the properties.

My questions are: What is the protocol around checking on properties? Are there any industry "best practices" that PM's follow, or is it simply at the PM's discretion?

I know in my last apartment, they checked your apartment six months in, to check fire/smoke detectors and at renewal. I'm assuming that an apartment complex with an onsite property manager is held to a different standard than one where it's a company that manages multiple SFR. That's just my assumption, but I'd like other investors who have PM's to chime in and advise how often they require or would LIKE their PM's to check on their properties.

Hi @Chanté Owens

I have both SFR and townhouse (in a condo community so HOA applies) that are managed by PMs I hired.

Both said they inspect 6 months (as this was what I was looking for but was already included in their list of to-do's) and of course at the beginning and end of the lease. During the move out there is an inspection but also one when the tenant moves out.

Now, I've asked about this and have yet to get an answer why I don't see any documentation on when they do this 6 months into the lease. And of course I get busy with something else so I don't follow up or press the point to them.

They told me they do this but I've not seen evidence of it and they document everything.

I suppose that because the move-in and move-out are super thorough that nothing escapes. So, if something were to happen at 6 months, at the move-out it would be caught because the move-in also shows defects.  The move-in defects are taken care of before the tenant proceeds with living in the property. I make sure that the move-in issues are taken care of in the week found.

I think it's what the agreement is between the owner and the PM.

@Chante Owens

I am not sure about CA, but in FL a property manager must be a liscensed Real Estate Professional. If this part of the business was able to be managed by entrepraneurs and people able to build a business around this it would be totally different... In my opinion. I think that Real Estate Agents do Property Management just to fill in the gaps of commision checks. It is just paper work to them. I manage my rental property well, but I do not trust anyone else to do as well as I do it. Most investors chalk it up to "A cost of business" and that is horrible because there is so much lost in the Property Management Business. 

With that said, I know a property management company that is a franchise. I think they have a business plan and a commitment to be better than just another PM at your local real estate company. If I were looking for a PM I would gravitate towards this kind of system to know they have a list of responsibilities and commitments to the owner.

@Raven Dorminey as a PM myself I do agree with some of what you've said but feel I need to voice my opinion. Some RE agents take on PM and they really shouldn't. You are correct in saying that they are just filling the gaps or what I see a lot of, they are simply helping out a friend or possibly client. But in fact they don't know what they are doing, they expose themselves and their clients to a high level of liability and risk and in the end they give us professionals a bad name. I work with a handful of agents who understand this and they referral rental business and tenants to me and I in turn refer buyers and sellers to them. In most states the real estate license covers a broad scope of the business and agents need to specialize their business and become professionals rather than make us all look like idiots.

@Chanté Owens it is my practice to do a Move-In inspection with pictures and documentation which is signed by the tenant as well as myself then posted for all parties, including the owner, to see. I then do another safety inspection after 30 days, undocumented to confirm that I have a good, clean, responsible tenant. If it's questionable I may continue with quarterly inspections again undocumented but frankly if it gets to this I will be writing lease violations that will result in them playing by my rules or they may be evicted. Generally I never need to go this far because I've already done a good job of screening the bad ones out. Next I will do a thorough Move-Out inspection with pictures and documented on the same Move-In checklist for comparison. Aside from these physical inspections I drive by and possibly snoop around the outside of every property at least monthly, my apartment properties I visit and walk the grounds weekly.

This, I believe, is how it should be done!  

@Daria B. Sounds like if they are doing what they say, then it's a good process and should be enough to catch anything. However, with you saying that they document everything, but haven't produced that documentation, I'd be pressing for that information, just for peace of mind.

@Raven Dorminey I'm sure that every state is different regarding having a RE license. I definitely don't know which states require PM's to have it or not, but it sounds like just having a RE license doesn't necessarily make them a good PM. If they are doing it to fill in for commissions, there is nothing wrong with that, in my opinion. BUT, they should be treating it at a high level of importance, because people are paying and depending on them to be the eyes on their properties. 

Thanks for both of your responses! I don't know why, but this PM business just intrigues me, because from most posts on this site and just speaking to people on the street, there is a HUGE area of opportunity in this space, if it were done right.

@Dick Rosen Good stuff! I think people should be looking to hire you or someone who handles the PM like this:

"I then do another safety inspection after 30 days, undocumented to confirm that I have a good, clean, responsible tenant. If it's questionable I may continue with quarterly inspections again undocumented but frankly if it gets to this I will be writing lease violations that will result in them playing by my rules or they may be evicted. Generally I never need to go this far because I've already done a good job of screening the bad ones out. Next I will do a thorough Move-Out inspection with pictures and documented on the same Move-In checklist for comparison. Aside from these physical inspections I drive by and possibly snoop around the outside of every property at least monthly, my apartment properties I visit and walk the grounds weekly."

All fantastic! Thanks for the input.

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