Listing agent versus property management company

[Joe S.]

Looking for thoughts on different ways of using a property management/ leasing agent.  Some investors use a leasing agent to find a tenant and then do their own collections and such. With a good tenant this would save them money by not having to pay the monthly percentage to a property manager. If and when a tenant is not an ideal renter then the investor probably wish they had the property manager in place still to pass the drama on to someone else. We have used a property manager on several of our properties, but they manage the property even after the tenant is placed. I was curious if the thoughts of some other investors about these two differences in the way that their property is filled and managed.

[Nathan Gesner]

Many property managers provide this service. We handle marketing, showing, screening, collecting the deposit and first month of rent, signing the lease, and getting the renter moved in. We deduct our fee, then hand everything off to the Landlord for day-to-day management. The Landlord feels they've saved some money and we get to start a relationship that may eventually result in them hiring us for full-time management.

As pointed out by @Drew Sygit, there is an opportunity for the PM to cut corners just to earn a quick buck. In my case, it would hurt me because I'm in a town of 10,000 and have a reputation to protect. I get a lot of referrals from these lease-only Landlords and sometimes they come to me for full-time management, so it's in my best interest to put my best foot forward.

Finding a good renter is the most important step, which is why Landlords hire me for that and then take responsibility for everything else. But screening is not perfect and can't predict the future, so some tenants eventually turn bad and the Landlords will come back to me to ask how to deal with a problem like tenants that stop paying rent, wanting to break the lease early, etc. You see, managing rentals is easy . . . until it's not. Even good tenants can turn bad and Landlords need to be prepared to deal with those situations. For this reason, hiring a full-time manager may be a better solution. Only you can decide what you can handle and what you can't.