How do you know if you have a good property manager?

Question

If you have never met your tenant, how would you know if the PM wasn't treating the tenant well.  My property is out of state so I don't know of any problems unless the PM tells me and so far haven't heard anything.  Wondering how many ensure that the PM is taking care of their property well and responsive to good tenants when the owner is a "passive owner" and not living in the area of the rental.

Nathan Gesner · Answer

I do not recommend contacting the tenant. Once you open that door it can create all kinds of confusion and conflicts. Your tenant may very well start playing you against the property manager just like a child does with their mother and father. I'm a property manager and I have a specific clause in my management agreement that forbids owners from communicating with the tenant about anything. If they want to view the property (inside) they can schedule it through my office and I escort them through. Even then, I warn them to avoid communicating with the tenant because they will try to manipulate the situation the majority of the time.

I recently tried to help a friend locate a tenant. My job was to market, handle showings, get the person under contract, collect first/last/deposit, and then pass everything to our friends for management. I was very clear: do not let the tenants negotiate anything with you! I found someone and they were scheduled to sign the lease and pay the deposit on a Monday. They came in to sign and I told them how much they owed. They said, "We talked to the owner and she said we didn't have to pay a deposit until next Wednesday." I called the owner and she confirmed. There goes our leverage! Sure enough, the applicants signed the lease with no money down and four days later sent a text message that they had changed their mind. We could go after them through the court system, but it's not worth our time. Had the owner listened to me, we would have had $1800 in hand to cover vacancy until a different tenant was found.

If you want to know how things are going, send an email to your PM and express your concerns. They should be able to provide you with a copy of the tenant ledger showing if the tenant is caught up on payments, paying on time, etc. You can also request an inspection that is recorded on video or photographs to show the condition of the home.

Just remember to be realistic about your requests. Inspecting 1-2 times a year is sufficient. You should respect the tenants' right to quiet enjoyment and your property manager's time. If you feel the property manager is not doing a good job, start researching for a replacement now instead of at the last minute. There are some great guides on how to find a good manager but it takes some effort on your part. You can't just hire the one with the lowest fees, either!

Daren H. · Answer

I would say your PM is probably doing okay if:

Your units stay leased long term

Your money shows up each month on time

You receive monthly statements detailing incoming funds and outgoing expenses

Expenses in the statements look reasonable and normal

Your PM is responsive to your calls, emails, etc

Your PM inspects the property's annually or semi-annually and documents with pictures

Your PM puts all agreements in writing

Your PM is proactive and discusses preventive maintenance actions

Your PM accepts being managed by You

Your PM knows when you can raise rents and when not to

Thomas S. · Answer

The only way to do it is to hands on manage your manager. You sit down with them and outline your expectations and request that they provide regular updates. You also stay in contact with your tenants, only a phone call away, and insure they have no issues.

Starting out it is fairly easy with only a few tenants and as you grow you will gain confidence with the PM and develop a solid working relationship. At that point random follow ups with tenants is all that is required.

There is no such thing as a "passive owner". You are a owner and a landlord with the legal responsibility of insuring your tenants are being treated properly. If you do not know what type of job your PM is doing then you have not been doing your job. It's not too late so just get on it.

Time to make some calls and set up a business plan for managing your investment.

Zachary C. · Answer

@Amir Navabpour,

You've got the address right? You could get old school and write them a letter I suppose, the risk being once you contact them they can contact you; and then the tenants skipping your property manager and going straight to you with every issue that arrises. If your payments are coming in as scheduled thats a pretty good indicator that it's working, so are long term tenants. If you see high turn over or unexplained missing/partial payments (which the PM company should be explaining before you have to ask) those are things that would make me want to see whats going on. Invoices for minor repairs would be showing that they are staying on top of things before they become bigger issues.

How do you know if you have a good property manager?

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