Anyone have good experiences with their property management company?

Question

We're out of state investors that have 3 properties in Birmingham. Class C/D neighborhoods with both Section 8 and private payer tenants. Managing the PM's is becoming a problem. I'm assuming that they're either understaffed and/or we're small potatoes for them. Wondering is anyone here has had better than mediocre experience with their PM company.

Adam Bartomeo · Answer

Most often owners have too high of expectations for C/D neighborhoods. These are very difficult properties to manage, and the tenants are very hard on the properties. The owners want the performance of an A class and blame the PMC for the investment. It's like blaming the Pinto driver for losing a race against a Corvette, its not going to happen.

Drew Sygit · Answer

@Bryan Hartlen could you please be more specific with the issues you are having?

Managing Class C & D properties is NOT for every PMC!

Some take on the business w/o having the proper systems in place to deal with low-demographic tenants & properties.

We also see owners being part of the problem - expecting Class A fees, service & results from their Class C & D properties.

Travis Biziorek · Answer

Bryan,

This is one of the biggest challenges when investing in C/C+ areas, and it’s even more amplified in D-class neighborhoods. In my experience, success in D-class areas almost always requires being local, extremely hands-on, and self-managing. It’s probably not that you’re “small potatoes” to your PM, but more a reflection of the nature of the market itself—low rents, properties with higher maintenance needs, and tenant issues.

These factors make properties in these neighborhoods more difficult to manage and generally less profitable for property managers. As a result, this isn’t the kind of market that attracts top-tier PM talent.

Your best solution might be to either:

1. Take on self-management if possible (and if you’re willing to put in the time/effort).

2. Find an individual you can trust to handle these properties, set up very specific instructions and processes, micro-manage them initially to ensure standards are met, and compensate them well to make it worth their while.

This approach requires more oversight on your part but can yield better results in markets like this.

Bryan Hartlen · Answer

Account Closed, we’ve never self-managed. We’ve always used a PM. With today’s technology it’s certainly possible to manage an OoS property (and many investors do). When things are running smoothly it’s hard to see the value of paying a PM 8 - 10%…. But when there are issues, not being local can make managing situations much more difficult than if you were local. For my partner and I, it’s a question of effort vs return. We’ve made the decision that neither of us want to deal with an after hour emergency call from a tenant so we use a PM company. The problem we’ve found, despite using other investor’s recommendations and extensive interviewing, is that so far, every PM company we’ve used is mediocre at best. The effort to manage a PM is not insignificant, and even with the effort to manage them the results are not what they should be. So every couple of years we get to the point where we can’t accept the PM company’s performance and we have to look for a new PM and hope we find a unicorn.

Kyle Mccaw · Answer

@Bryan HartlenManaging low-end properties can be demanding due to higher tenant turnover, increased maintenance needs, and frequent rent collection issues. These types of properties require experienced management to navigate the challenges effectively. If you feel like you’re managing your property manager, it’s a strong sign that the manager may not be the right fit. A professional property manager should handle the heavy lifting, ensuring your investment is protected and profitable without adding stress to your plate.

Drew Sygit · Answer

@Bryan Hartlen thanks for sharing more info.

Agree that it shouldn't take this long to do MoveOut Evaluation!

One question that you may not want to post here for legal reasons, is how much are you paying your PMC?

Often, owners beat up PMCs for a low price, but fail to understand the PMC will often cut corners to make sure they are still profitable.

Feel free to DM me if you'd like more insights on all this (we don't do biz in Alabama so got nothing to lose).

Here's some other "copy & paste" advice on how to search for a better PMC:

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Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Bryan Hartlen · Answer

@Drew Sygit & @Adam Bartomeo, we're experienced investors and I don't believe our expectations are out of whack. We don't buy in warzones and we explicitly verify that the PM is experienced with Class C/D properties and tenants and Sec8.

We've had issues with bad tenants where we've had to evict. That's not on the PM but how they handle the eviction process is. Every next step of the process gets executed days or weeks after it's supposed to. When we follow up it takes multiple business days and sometimes more than a week to get a response.

The latest example, we had a set out (Sheriff watches over as old tenant's stuff is removed from the property) on Dec 13th. We're still waiting for the PM company to provide an inspection report on the setout & a rehab estimate for the turn. Even with a week off for Christmas and New Years, there's no reason for this delay.

@Travis Biziorek: self management isn't something that we're willing to undertake. We'll sell the properties if we can't find a PM company that works.

Anyone have good experiences with their property management company?

Anyone have good experiences with their property management company?

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