Property Managers The most expensive lesson I learned as a remote landlord
Rental Property Investor · MN · Member since 2026 · 5 posts · 7 votes
Property Managers The most expensive lesson I learned as a remote landlord
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Adam TafelBusiness Member
Real Estate Agent · St. Paul, MN · Member since 2017 · 566 posts · 392 votesEvery property manager needs to be managed. PMs are the most frustrating thing about the business, because even the best PM won’t be as effective as a skilled owner-operator. In a tight market where cashflow can be tough to come by, it’s the PM factor which puts most deals out of reach for investors in the 1-12 unit space in our market.
It’s not so much the fees and lease up commissions, it’s the unknowns regarding maintenance and repair pricing. I used to have a PM contract on a 30 unit building in Saint Paul, we actually made most of our profits off the air filter contract at 12k/year. A previous vendor had bid it at 12k, we saw this when we took over and thought “hmmm we can take care of that..”. I had another PM tell me recently that his biggest profit margin activity is swapping fire detector batteries. These are the things a self-manager doesn’t think of when underwriting to add PM.
Everyone should self manage for as long as possible IMO, and by “everyone” I mean the 99% of us who own under 5 properties. Get to know the buildings and their quirks, the best lease schedules, the difficult neighbors, the best tenant sources, the boiler system, etc. If you don’t, you’ll be paying $100/hr or more for vendors to figure everything out, as it can take a year or 2 to stabilize a new deal.
Upside Property Sales 4.9108 Reviews
10 Replies
- 3moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
Your post highlights the distinction between asset management and property management. Both are necessary, and hiring a property manager does not eliminate the owner's responsibility to oversee the asset.
As a property owner relying on a PM, your oversight obligations extend well beyond reviewing monthly financial statements. Are vendors providing certificates of insurance and additional insured endorsements? Are contracts being signed with proper indemnification and risk transfer provisions? Are warranties being obtained and preserved? Is preventative maintenance being performed and documented? These are the items that will have a significant impact on the long-term performance and risk profile of the property
In my experience, what separates good property managers from the pack is their ability to manage risk, documentation, vendor relationships, and preventative maintenance in a way that protects the owner's investment over the long run.
- Property Manager · Houston · Member since 2026 · 30 posts · 16 votes3mo
That's a tough lesson, Denise, but an important reminder for every investor.
I think one of the biggest misconceptions about property management is that it eliminates owner involvement. In reality, it changes the owner's role from operator to asset manager.
I've found that the best owners, especially remote owners, still review monthly statements, keep an eye on maintenance trends, and ask questions when something doesn't look right. Trust is important, but so are systems and verification.
Out of curiosity, were there any early warning signs in the reporting that you can see now in hindsight, or did the issue come completely out of the blue?
- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes3mo
@Stuart Udis, it is my belief that a properly drafted Management Agreement, when actually reviewed by the Property Owner and/or their attorney, should quell a number of those concerns. I'm sure it varies by State as well, but for instance here, companies I worked for were all bonded, as were accounting and licensed PM's.
Part of it however, is the Client responsibility to ask questions about important processes such as preventative maintenance and documentation procedures for move ins/outs and repair jobs among others. The application and screening processes are critical to understand.
Many PM's are transparent on operations, providing interested Clients with summaries of processes, copies of standard key documents and financial reports, and other documentation to communicate what the PM actually provides. Others just nod their head and tell you not to worry. Many Owners read the Management Agreement like most Tenants read their Rental Agreement...front page, large print, "cost" without worrying about the details. Like Attorneys and Auto Mechanics, some are good some are not, you need to do your homework before handing over a piece of income property.
Frankly, it is shocking to me how FEW Owners even glance at their monthly financial reports. If they do, it is usually five or six months later, long after it is usually possible to change course; and details are no longer "top of mind" for the PM, so time consuming research is often needed for a full and complete response for a question that could have been answered in seconds during the first 30 days the report was available. - 3moAdam TafelBusiness MemberReal Estate Agent · St. Paul, MN · Member since 2017 · 566 posts · 392 votes
Every property manager needs to be managed. PMs are the most frustrating thing about the business, because even the best PM won’t be as effective as a skilled owner-operator. In a tight market where cashflow can be tough to come by, it’s the PM factor which puts most deals out of reach for investors in the 1-12 unit space in our market.
It’s not so much the fees and lease up commissions, it’s the unknowns regarding maintenance and repair pricing. I used to have a PM contract on a 30 unit building in Saint Paul, we actually made most of our profits off the air filter contract at 12k/year. A previous vendor had bid it at 12k, we saw this when we took over and thought “hmmm we can take care of that..”. I had another PM tell me recently that his biggest profit margin activity is swapping fire detector batteries. These are the things a self-manager doesn’t think of when underwriting to add PM.
Everyone should self manage for as long as possible IMO, and by “everyone” I mean the 99% of us who own under 5 properties. Get to know the buildings and their quirks, the best lease schedules, the difficult neighbors, the best tenant sources, the boiler system, etc. If you don’t, you’ll be paying $100/hr or more for vendors to figure everything out, as it can take a year or 2 to stabilize a new deal.
Upside Property Sales 4.9108 Reviews - Rental Property Investor · MN · Member since 2026 · 5 posts · 7 votes2mo
@Jamaal Pratt This is a sharp way to put it, and it matches my experience exactly. The shift from operator to asset manager is real. My mistake was treating it as a clean handoff rather than a change in what I was still responsible for monitoring.
To your question: in hindsight, yes, there were signs. They just did not announce themselves. The expenses crept up gradually with no clear explanation. No single month looked alarming on its own, which is exactly why it slipped past me. I was reviewing the bottom line and trusting that the line items underneath it were sound. If I had been comparing costs month over month and asking why a number kept climbing, I would have caught it much sooner.
So it did not come out of the blue. It came from me deciding I had earned the right to stop looking closely. That is the part that stung. The systems and verification you mention are not a sign of distrust. They are the job. I kept reviewing the statements after that precisely because handing off the work does not hand off the responsibility.- 2moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Denise Gochenouer:
@Jamaal Pratt This is a sharp way to put it, and it matches my experience exactly. The shift from operator to asset manager is real. My mistake was treating it as a clean handoff rather than a change in what I was still responsible for monitoring.
To your question: in hindsight, yes, there were signs. They just did not announce themselves. The expenses crept up gradually with no clear explanation. No single month looked alarming on its own, which is exactly why it slipped past me. I was reviewing the bottom line and trusting that the line items underneath it were sound. If I had been comparing costs month over month and asking why a number kept climbing, I would have caught it much sooner.
So it did not come out of the blue. It came from me deciding I had earned the right to stop looking closely. That is the part that stung. The systems and verification you mention are not a sign of distrust. They are the job. I kept reviewing the statements after that precisely because handing off the work does not hand off the responsibility.From the management side, owners that want to be "hands off" are a problem.
We WANT them to be engaged, otherwise what happens is one day they take the time to look over the numbers and make a snap decision that we're not meeting their "secret" expectations and terminate us.
We've actually got several live reports for owner on their portals, so they can easily see all the numbers all the time. The most important one is a P&L with monthly YTD breakdown - which makes it easy to look for anomalies that need further investigation.
We can see who looks at them, and few owners do:(
Logical Property Management4.9450 Reviews
- Property Manager · Fort Worth, TX · Member since 2014 · 77 posts · 29 votes2mo
This one hits close to home. I've managed over 450 homes for 30 years and the number one thing I tell owners is this... hiring a PM doesn't make you passive, it makes you a different kind of active. You should be reading every statement line by line, every single month. The red flag isn't always a bad PM... sometimes it's an owner who stopped paying attention because they trusted the process too much. Build in a monthly 15-minute review of your statements and ask your PM to walk you through anything that looks off. That one habit alone has saved owners I know from losing tens of thousands.
- 2moAmit PatelBusiness MemberProperty Manager · Bartlett, IL · Member since 2025 · 139 posts · 56 votes
Hey Denise, I’m really sorry that happened to you. Getting taken advantage of by someone you trusted, especially from a distance, is incredibly frustrating and it makes total sense why you’re sharing the story.
You’re right that being completely hands-off isn’t realistic, even when you have a manager you like. The truth is, problems tend to stay hidden when no one is looking, and they usually get worse over time. At the same time, we understand that most owners don’t want to be glued to their email or logging in every day either.
That’s exactly why we built a clean owner portal with online reports that are available with one click. Owners can see their P&L, income and expenses, work orders, and occupancy numbers anytime they want without having to ask for updates or dig through emails. It’s designed so you can stay informed without it becoming a full-time job.
The owners who check in occasionally (even just once a month) almost always catch small issues early and have much smoother relationships with us. Complete hands-off usually ends with someone getting surprised later, which helps no one.
I hope your story helps other remote owners find that middle ground between trusting their manager and still staying lightly informed.
Casanomy Property Management561 Reviews - 2moJeff SchemmelBusiness MemberReal Estate Agent · Saint Paul, MN · Member since 2014 · 384 posts · 401 votes
@Denise Gochenouer nice to see a familiar face around here :) The local Minneapolis/St. Paul forums are pretty empty these days. Hope you're doing well. If you're around MSP and interested in catching up, you can send me a message/text anytime.
- Rental Property Investor · MN · Member since 2026 · 5 posts · 7 votes2mo
@jeff
@Jeff Schemmel Good to see you! Absolutely, we will catch up soon!
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