All Forum Posts by: Bob Collett

A couple of weeks ago I picked up a new property management client with a number of properties in the Cleveland area. As I began onboarding the existing tenants, one of the tenants was quick to say: “Oh, I just wanted to let you know that the former property manager just made bail”. This led me to do a review of where my property management clients and where come from. Here are the results:

• Referrals from REIA – 7%
• Referrals from other Real Estate Agents – 10%
• Directly from Property owners with bad property managers – 82% (about half of these owners seeking urgent help come from bigger pockets)

I follow a lot of the debate on Bigger Pockets regarding unlicensed contractors, pros and cons of wholesale, and so on. If someone chooses to work as an unlicensed contractor, that is there choice. There is no law against it in Ohio. An investor can choose to use only licensed and insured contractors or not. The only real requirement is to follow the law with respect to reporting to the taxing authorities and not pay “under the table”.

However with property management it is another thing altogether. All property managers in Ohio must be licensed real estate agents in the state of Ohio. There are a number of reasons for this. Anyone who conducts property management for anyone (even friends) else’s property in the State of Ohio must do the following:

• Be a licensed real estate agent
• Place all retained rents directly into a State of Ohio audited Trust Account
• Have a written property management agreement with each property owner stating the start and end date of the agreement among other things
• Deliver regular financial periodic reports to the property owner.
• Display Fair Housing language and logo where required
• Maintain a ledger sheet for all transactions including name and address, name of all parties to the transaction, amount and date of all deposits, amount and date and check number for all disbursements, running balance for each property
• Register each property owned by an out of county owner, with the county auditor
• Broker may not co-mingle funds

Further, a Broker may use an unlicensed assistant only for certain administrative or clerical duties, maintenance, showing a property and other specifically defined tasks. An unlicensed assistant is specifically prohibited from negotiating leases, interpreting a lease, or claiming to be in a position of authority or approval. The unlicensed assistant must be closely supervised by a licensed Broker.

There are many fine property managers in northeastern Ohio. We regularly and happily compete with each other. Occasionally we even refer business to each other when it is in the best interest of our clients. Hiring an unlicensed agent is asking for trouble. Not only do they not follow the rules... they do not know the rules... and probably do not know that it is a criminal offense to hold yourself out as a property manager if you are not properly licensed in Ohio. Sooner or later, they will end up out of business with your money in their pocket.

The first thing to do I when considering hiring a property manager in Ohio is to lookup up the individual’s real estate license. Even some well known licensed property managers allow unlicensed individuals to pretend to be property managers. Be sure to check on the status of the individual agent who will be handling your property, check on their license at:

After you check the license status, then continue with your due diligence. We all make mistakes and have different strengths and weaknesses. Some otherwise great property mangers get themselves in a bit of trouble simply because they grew too fast or spread themselves too thin. Some do not have enough back end support. Some do not have enough experience. Some are great, are honest, work hard and care about their clients.

If you had a bad experience with a property manager here in Ohio, please let us know what happened. I prefer that you do not mention names in a public forum. Just let fellow BPers hear the kinds of horror stories that go on.

Welcome.

@Benjamin Stevic - Welcome Benjamin. I have a couple properties I manage in Akron. We have a Bigger Pocket meeting once a month here in the Cleveland area. You are welcome to join us.

Good luck

Yadira, I am agent in ohio... If I were your agent, I would sent emails to all offers announce... Thank you for your offer. I have authorized to inform you that we have multiple offers. Please submit your best and final offer by 5 pm on Thursday.

This strategy may cost you your deal... but if you are underpriced, you just might bump it to the right number.

You must authorize your agent to do this.. or he is not allowed.

Good luck

@Michael Fanoni - I agree with Manolo. I will use unlicensed handyman type guys when it makes sense, but not because I am trying to help others catch a break. Business is business and charity is charity. I learned a long time ago not to mix the two.

Be careful and be smart. Don't use bums or criminals just to save a few bucks... they will hurt you in the long run. Keep the handyman guys off ladders, and probably away from demo work. Otherwise, they can be great for smaller jobs supervised by you.

@Federico Gutierrez - glad to hear it... he will be in good hands.

@Cody Race I ran a vacation rental / property management business in the Cape Haze area for a period of time. It was a lot of work, but quite easy to get clients. I created a good website and also marketed my properties on VRBO, etc. I gave it up, because both property management and vacation rentals requires a license in Florida, and there are high taxes about 12% that you have to pay... although private owners frequently do not follow the rules when renting to friends and family.

One day soon, I will winter over in Florida and get it going again.

Hi Kathy... I sent them over again today with an overview of services and fees. Let me know if I can answer any questions.

@Matt Powell ... because it is real estate, not a lamp. This is specially illegal in Ohio. Even a licensed agent is not allowed to pay any referral fee to an unlicensed person in Ohio. I agree, it is not reasonable... but it is the law.

@Jason Campbell ... Brandon is correct. You are not allowed to do any property management in Ohio without a real estate license. Moreover, you are not allowed to write a lease unless you are an attorney. 

This is true even for friends. The only exception is if you are a regular employee of the owner.

Nonetheless, it is very kind of you to try to help and many non-licensed individuals do it anyway. The fine is up to $1000 per day if someone gets mad enough to throw the book at you. This would probably only happen if something really bad happened... such as a discrimination lawsuit or excessive damage cause by something you did or did not you.

Also, in Ohio a property management agreement must be in writing with a start date and end date.

All rents must be deposited into a state audited trust account.

Good luck.