Vetting Property Managers – Would This Tool Help?

Question

Hey investors,

I’m thinking about building a tool that helps investors actually find the right property management company — and keep them accountable.

Why? Because I’ve struggled myself. I’ve hired and fired several PMs over the years. Some started strong, then got lazy. Others were bad from the jump. What I’ve noticed is that when I try to vet new PMs online, I mostly find Yelp and Google reviews that seem to come from disgruntled tenants. Sometimes helpful, but rarely do I find feedback from other investors like us.

So here’s the idea:What if there was a site — think Yelp but only for rental property investors — where PMs are reviewed based on how they manage properties from the owner’s perspective?

Imagine a scorecard or dashboard for each PM:

• - Days to fill a vacancy
• - Avg. rent collected vs listed
• - Communication speed
• - Maintenance turnaround
• - And even qualitative stuff — like professionalism and reliability

Other investors could share their experiences, rate performance, and flag issues. It would be a lot easier to see red flags early, or find a PM who's crushing it in your market.

It wouldn’t just help with choosing the right PM — it could help keep them on their game, knowing there's visibility and accountability in the community.

Would a tool like this be helpful to you? Am I overthinking it, or is there a real need for this in our space?

Thanks for any feedback!

Adam Bartomeo · Answer

The far majority of our reviews are from our owners and they are all 5 Stars. I think a tool that you are describing will be difficult to implement and track. Most PM's don't know their vacancy rate much less maintenance turnaround time. Having the tools to tack these metrics would be costly. I do agree that there are a lot of FAKE PM's out there and there needs to be a way to find them.

Drew Sygit · Answer

@Ryan G. your biggest challenges:

1) Getting SATISFIED owners to participate.- People get upset and they want revenge. So, 80%+ of Reviews are negative. Go ahead and try to get positive Reviews and see how low the cooperation rate is:(

2) How are you going to VALIDATE your data?- The MLS does this via agent licensing requirements. Zillow does NOT - why do you think that is?

Corby Goade · Answer

I own a property management company, so you can take my advice with a grain of salt. I think a tool like that might help investors make decisions, but I don't think it will actually help them make money or be more successful.

I've been doing this for a LONG time- over 25 years. I have many of my own investments, run a business helping other people learn how to invest in my market and we manage those properties for them too.

I started our PM company because- you are right- most PMs are pretty awful, not all, but most.

What most investors don't realize is that they have no idea what is actually GOOD for them. DOM isn't a good indicator because, in many markets, it might take longer to find a quality tenant who will stay and care for the property over the long term. I could place lots of crappy tenants really quickly, no problem.

Just like sellers- landlords always think their property is the nicest in the neighborhood becuase they painted it four years ago or mowed the lawn last year. Most new investors want to over price their rentals, causing long vacancies and they think it's the property managers fault, the pictures aren't good enough or they aren't advertising enough or they didn't tell the prospective tenant about the new paint from three years ago.

The challenge is that many new investors wouldn't know a good property manager if they found one because most of them just want to hear "yes sir," and won't hear meaningful advice or feedback that will help their properties perform over time.

PMs who screen properly and manage professionally probably DO have longer DOM and turnovers and that's not necessarily a bad thing.

Speed of communication and maintenance turnaround are absolutely vital, but most new investors don't want to approve maintenance items either- they think their PM is trying to rip them off when they need to make repairs, so that's a tough one too.

I know this is a very difficult thing for new investors- finding a quality PM, but trusting a pro is part of the deal too and that's the rub, IMHO. A good PM can save an investor tons of money and headaches, but there has to be some mutual trust there and many times a good PM may pass on newbies because they often require some heavy lifting.