What Makes a Property Hard to Manage?

Question

From a management perspective:

What tends to create the most operational challenges?

• Tenant turnover
• Maintenance issues
• Property type
• Poor initial underwriting

Curious what others are experiencing.

Lee Waldrop · Answer

@Tracy Thielman

Property Class! Asset class determines the type of investor and type of resident. As a PMC, stuck in the middle of a C or D class asset is no fun. Cheap owner not caring about the resident and a resident with lots of volatility on average with damages/move outs/not paying, etc. We have found since 2011 that the property class directly correlates to the education/professionalism/ethics of the landlord and the resident. If you want to manage or buy in that world, you are that world. Same with living in it.

Drew Sygit · Answer

Tenants!

They cause the majoity of maintenance issues.

Ryan Stomel · Answer

From the commercial side, property type is the biggest factor — and specifically the lease structure that comes with it. NNN and modified gross leases spread management complexity in ways that residential just doesn't replicate. With commercial, you're not just collecting rent; you're reconciling CAM charges annually, tracking which tenants have expense caps (and which don't), managing gross-up provisions on multi-tenant buildings, and dealing with tenants who have attorneys who've seen everything. One bad lease with ambiguous language on who pays what creates years of operational friction.

That said, poor initial underwriting is the silent killer that makes everything else worse. If you bought a property where the lease terms don't match what you modeled — say, you assumed full NNN but there are carved-out exclusions for certain roof and structure items — you end up subsidizing tenant expenses you didn't plan for. I've seen landlords get burned on older retail centers where the CAM pool was capped at such a low level that real operating costs ran 30-40% above what tenants were contributing. That's a management problem that was really an acquisition problem in disguise.

Ryan Stomel · Answer

Christopher raises something that doesn't get talked about enough — the judgment layer on top of the financial analysis. The spreadsheet tells you a tenant is 30 days late; it doesn’t tell you if they’ve been reliable for 3 years and just lost a job, or if this is the fourth time in 18 months.

For C and B-minus properties specifically, my approach is to be process-heavy on documentation and communication, even when I want to be empathetic. If a tenant is telling me they’re in hardship, I want that in writing — a written payment plan with clear dates, signed by both sides. Not because I’m being hard-nosed, but because it signals to the tenant that I’m taking it seriously, and it gives you something concrete to fall back on if the situation deteriorates.

The other thing I’ve found useful: look at the behavior pattern, not just the current situation. A tenant who proactively reaches out before they’re late, explains what happened, and proposes a catch-up plan is a very different risk than one who goes quiet and only responds after you contact them. The communication pattern is often more predictive than the stated reason.

On the software side, having a clean log of all tenant communications matters a lot on these calls. We use PigJet (pigjet.com) which keeps tenant correspondence and payment history in one place, so when I’m deciding whether to work with a tenant or start the process, I’m looking at the full picture, not just the last 30 days.

Christopher Adrian · Answer

One of the biggest operational challenges in property management is quickly distinguishing between tenants who are facing a legitimate short-term hardship versus those who are simply not going to pay.

Coming from an accounting background, the financial analysis was straightforward. The real learning curve has been developing the judgment to know when empathy is warranted and when firm boundaries are necessary. Getting that balance right can turn a struggling tenant into a long-term reliable one — or prevent months of lost rent and headaches.

In my experience managing a diverse portfolio for both foreign and local investors, the ability to read situations accurately and communicate effectively makes a significant difference in outcomes. It’s not always easy, but it’s one of the most valuable skills in this business.

How do others approach this balance, especially with C or B-minus properties?

What Makes a Property Hard to Manage?

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