Opening a Property Management Company and would love advice!

Member since 2021 · 2 posts · 1 vote

Hi everyone! I am newer here to Bigger Pockets. I am going to be opening my own property management company here in Texas and would love some feedback/advice from those who have used a company in the past or is currently using one.

What do you like best about using your current PM company and what’s the most appealing feature/s that the PM company offers you?

What is a reason you’ve had to fire a PM company in the past?

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Scott M.

Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes

Similar to @Nathan Gesner before starting my own we used them, a lot of them. And we had clients that had used them, a lot of them. We learned more than I can possibly type by using them and talking to our client base that was fed up with most everyone locally. We took bits and pieces from different companies that we liked. A company in Dallas was the only one to properly communicate. One in Orlando handled work orders especially well. So on and so forth. We also created a company just for our own properties first. We cut our teeth on our own homes and continue to do that today. When we have something new to try out we try it out on our own homes first, refine the process and system and then open it up to the client base.

We found most property managers can't communicate and hide from problems. Don't be like some tenants to turtle or get defensive and rude and lash out or hide. Address issues head on and your clients will appreciate you for it.

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Before I became a Property Manager, I used one. My biggest problem was the lack of communication. It was like pulling teeth to get information sometimes. When someone is watching my assets, I expect them to keep me informed of what's happening.
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Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
4y
No one likes their property manager. Most investors I speak with/assist feel like they over charge and under deliver. I understand from their point of view and try to explain that the PM is not getting rich off them in most cases. There are costs involved to staff, answer phones, keep books, mail checks, answer phone calls, place tenants, etc.
I think most also don't like many of the shenanigans many PMs are pulling these days to increase the PM profits at the cost of the investors. Things like self showings. Most investors are appalled when they find out the PM is not showing the property and allowing almost anyone to go unescorted. One popular one around here with investors almost never answers the phone or returns phone calls from agents or prospective tenants when the property is vacant. Tenants often tell me if X company is the PM, then I don't want to live there because if they don't answer the phone today, will they answer if I have an issue. Because they offer a small discount vs most PMs, investors seem to like them, but I also notice their properties often sit for a month or two empty and dirty. Investors wondering why their properties sit vacant in a hot market.
Put the properties in MLS with fair compensation to a tenant's agent, so you know you get maximum exposure, get the maximum number of applications, get the best applications, get tenants perhaps willing to pay above asking price.
Remember PM business is a lot of work for low return and highest litigation rate for licensees. That's why so many brokerages don't do it. Model out how many properties you need under management to staff right and still be profitable and provide the level of service you want to provide and investors want.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
4y
Until you get to 100-150 properties, you either have to be a one-person band or accept that you'll lose money.
It's not an easy growth period.
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Scott M.
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
4y
Similar to @Nathan Gesner before starting my own we used them, a lot of them. And we had clients that had used them, a lot of them. We learned more than I can possibly type by using them and talking to our client base that was fed up with most everyone locally. We took bits and pieces from different companies that we liked. A company in Dallas was the only one to properly communicate. One in Orlando handled work orders especially well. So on and so forth. We also created a company just for our own properties first. We cut our teeth on our own homes and continue to do that today. When we have something new to try out we try it out on our own homes first, refine the process and system and then open it up to the client base.
We found most property managers can't communicate and hide from problems. Don't be like some tenants to turtle or get defensive and rude and lash out or hide. Address issues head on and your clients will appreciate you for it.
5 Reply
Valentina Naumenko
Property Manager · Orlando Kissimmee, Daytona Beach & Cocoa Beach · Member since 2016 · 331 posts · 166 votes
4y
Congratulations on making this decision! Our customers appreciate transparency and effective communication. Reply instantly and provide clear answers. Answer the phone 📞 also, there are two books “Successful Property Managers: Advice and Winning Strategies from Industry Leaders”. I strongly recommend them. In general, property management is fascinating area of real estate. Good luck to you and your team!
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Originally posted by @Drew Sygit:
Until you get to 100-150 properties, you either have to be a one-person band or accept that you'll lose money.
It's not an easy growth period.

I network with a lot of property managers through NARPM. The general consensus is that you can be very profitable as a one-man show, or as a larger organization with 300+ doors. Between 100 to 300 doors is where you have to add employees and your income will grow at a slower rate than your expenses. This was true in my own business. Things were going well until I started hiring employees. I wasn't going broke, but I was growing doors and not growing my income. Once I got over 300 units things leveled out and then became very profitable shortly thereafter.
I also gained experience and got better at building a profitable company, which can't be dismissed.

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Sunny Alexander
Real Estate Broker · Tampa, FL · Member since 2020 · 103 posts · 74 votes
4y
@Scott M. agreed about communication challenges.
@Brittany Buono good luck and congrats! If you answer your phone and are empathetic you will thrive.
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Brittany Buono
OP
Member since 2021 · 2 posts · 1 vote
4y
Thank you everyone for the advice/feedback!
As a realtor, I’ve seen how much lack of communication there can be with PM companies and my clients don’t want to rent their houses because they are worried with how long it would take to get a service request approved if they don’t communicate now.
This all helps push me in the right direction!
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Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
4y
@Brittany Buono You said it yourself. Communication is a big issue when working with PM. Congratulations and Good luck with everything.
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Isaac S.
Member since 2018 · 563 posts · 562 votes
4y
Rule 1. always answer the phone
Rule 2. always return messages within 2min-24hours
Rule 3. don't forget rule 1!!!
but, I guess that's what everybody means by "communication"
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Scott M.
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
4y
Interesting there is a lot of phone talk on this thread. From a client perspective I can say phone calls are super rare. Tenants are another story but even for tenants nothing like it was 5 yeas ago. As the years go on phone calls are not really the main way our clients communicate with us.
Even when a phone call is needed it almost always starts with electronic communication to set up that phone call.
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Originally posted by @Scott M.:
Most of my communication with owners is via email. And for many owners, "communication" simply means they receive a detailed statement every month and we only reach out if there are deviations to their income or other major issues that can't be addressed in the monthly statement.

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John T.
Rental Property Investor · Central U. S. A. · Member since 2013 · 296 posts · 149 votes
4y
I had to fire a PM once (the only one I ever had) because:
Improper bookkeeping
Slow in paying rent
Inadequate tenant screening
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