A Few Lessons Learned on Working with Property Managers


I recently had an episode with a property manager and thought I’d share some obvious wisdom with everyone. We all have busy lives and from time to time we forget to do what we’re supposed to.


Stay on Top of Your Property Managers!

Don’t just assume that they are going to do everything you tell them to do.
I just dealt with a situation, where, had I been on top of things, there wouldn’t have been any problems. I needed a contractor to handle an electrical issue on an out-of-state multi-family property. I found one (always look for your own contractors and other servicemen – the odds are you’ll get a much better rate then the ones your property manager recommends) and set the ball in motion to get the job started last week. Today I get a phone call from the contractor asking when he can get into the property!

I was incensed!

Wasn’t my manager supposed to be handling that?
If I had stayed on top of things instead of just handing them off, they would probabaly have gotten taken care of (OR if they used their own people – managers work much harder when they get a piece of the action!). Instead, I had to get them on the phone and express my serious disappointment (ANGER).


That, my friends is another little lesson learned for me (AGAIN)!

About Author

Joshua Dorkin

Joshua Dorkin (@jrdorkin, Google+) founded BiggerPockets.com when he saw a need for free, trustworthy information about real estate investing online. Over the past 12 years, Josh has grown the site from self-funded hobby to full-time job and passion. Today, BiggerPockets brings together over 600,000 members, housing the world’s largest library of real estate content, iTunes’ #1 real estate podcast, and an array of analysis tools, all geared toward helping users succeed.


  1. Because of the nightmares I have heard about property management, I still havent given up control of my 30 some units. I just pay my handimen to collect rent and act as property managers. at $500/unit I woud be paying a management company over $1500/mo and I can get 100 handiman hours from that amount of money

  2. As a property manager, I must ask “what about the clients that won’t do the most basic things that are required of them?”

    For instance, authorizing work to be done and then waiting weeks to actually pay for it when they promised “I will send the money over tonight!”

    Or naming you as additional insured on the liability insurance, which is a requirement of the contract — which you mentioned to them many times before signing it?

    Or owners who won’t provide you with the most basic of paperwork that is required to effectively do your job?

    Or owners that claim they want to be “100% hands-off” but question every move that you make…only after telling you that they want you to do what you think is best?

    Or the owner that says he wants 3 quotes from different vendors for everything and then asks why something isn’t done yet. Well, let me think… I have to coordinate three vendors to visit the property … you won’t make a decision before then. Although my vendors love me, I am still subjected to their schedules. Also, I’ve noticed that when an owner questions the price I get for them, and they ask me to shop it around, the original price is always the lowest. A big part of my job is knowing who to turn for the best work, at the cheapest price, that is completed in the shortest amount of time. Also, I have “buying power.” That’s why I get better prices than everybody else — I don’t hire a plumber every six months, I hire a plumber every 2 weeks. It’s like economies of scale, minus the widget production.

    Or owners that don’t understand that their property is priced $300 over market and refuse to lower the rent, only to scream at me when it’s not being rented — whereas every other property I’ve had listed at or just above market rent was rented in a decent amount of time?

    Or, the biggest obstacle by far, owner’s who watched an infomercial, bought up properties with none of their own cash and then can’t understand how come there are real operating costs involved?

    There are two sides to every story. About 80% of my clients are great. 20% are extremely difficult. That difficult 20% are also the one’s that consume most of my time. There’s that famous 80/20 principle.

    That same 20% are also the one’s who made a bunch of false promises to me in order to get the best rate that we offer. The cheapest people usually always expect the most. Ironically, they are not usually as successful as their peers. Why? Their peers know that you have to pay for quality — it’s not free — you get what you pay for!

    That’s the story from the other side. While the owner is busy trying to get their property manager to do something expected of them, the property manager is busy trying to get their dozens (or more) of clients to do what is expected of them.

  3. Jay – You make some excellent points! There are certainly a fair number of investors who make their manager’s lives difficult. I’m glad you’ve shared the other side with us, as it is great for landlords to see what managers can go through.

    Unfortunately, that is the nature of the beast. If you don’t want to deal with those stresses, you are probably in the wrong business. Maybe you should put together a handbook or something. I’d be glad to put it out there!

    On your point of finding vendors, in my experience, every contractor that I’ve been recommended from property managers gives overpriced bids. When I look for my own contractors, on the reccomendations of friends/fellow investors, I inevitably get a better price AND they typically do better work.

  4. Joshua,

    I forgot to mention that based on your entry, I would not group you in that 20%. I just wanted to highlight why property managers get frustrated. It’s rare to see a property manager weigh in on things.

    As for being in the wrong business, I have to disagree. I have never lost a client. 80% of my clients make my job enjoyable. 20% make it pure hell. I keep them on, as I realize its just their personality, but I still have a right to anonymously complain about them — just as they have a right to complain about me.

    Overall, I love my job. It’s trying and stressing some days, but what job isn’t? I’d be bored and feel unchallenged if I didn’t have a never-ending to do list.

    Based on the feedback that I get from both current and prospective clients, I am about as responsive as they get. I think a big part of that is that I am not trying to grow our property management division too quickly. When most property managers start out they have to add a bunch of clients to break even.

    We were already successful in our other business, so I was able to start and grow this slowly. I am always accessible through my BlackBerry — whether you email me at 7 AM or 10:30 PM. I also use gotomypc.com, so my office desktop is available to me anywhere I have an internet connection. Clients love that I do business around their hours. I do squeeze 6 hours of sleep in a night, and I manage to take two or three Sunday’s off each month. Otherwise, it’s work, work, work. I will happily admit that I am a workaholic.

    I will tell you though … if you’re one of those clients that make me hurry up only to wait on you, the day is going to come that I am going to stop hurrying up. You get what you give.

    Also, we have in-house people to do just about everything that doesn’t require a special license (plumbing, electrical, HVAC, etc.). Not only do our prices come in an average of 30% lower than most companies (we discount for our property management clients), but the client also avoids the contractor fee, which is typically 20% in his market. I cannot fathom how we could charge that extra 20% when we are acting as the contractor.

    As for why you probably get overpriced bids — the property manager makes more money if there is a percentage based contractor fee. Also, I wouldn’t be surprised if the contractor slips the property manager some money for each job. We do not have that incentive, as we are doing the work in-house.

    As for a handbook, that sounds like a great idea! The only thing I’d be concerned with is that we’re told we do things differently than the “other companies out there.” Before starting I picked the brain of the owner of one of the more respected companies in the area. I do not believe in reinventing the wheel. I love how they run their business and wanted to do the same. Luckily, that mentor is also my friend, so we now pick each other’s brain.

    My original point is that there are usually two sides to every story. For every difficult property manager there is a difficult client.

    Do I make mistakes? Surely I do! I am human, after all.

    Do my clients make mistakes? Surely they do! They are human, after all.

  5. As for how to choose a great property manager:

    Mystery shop them.

    Call about a vacancy and go as a prospective tenant. Call their office a few times acting like you have the wrong number to see if they pickup each time. How are they answering the phone? Are they professional? Also, call after hours one time to see what happens. Is there an answering service? Is there an emergency voice mail box?

    When calling them as a prospective client, they are going to tell you whatever you want to hear. If they have no idea you’re a prospective client, then you are going to get the real them.

    Most importantly, ask for references! At least three owner and tenant references. You want to make sure that tenants are kept happy, too!

    When you call the references, ask unique questions like “have your tenants ever been without heat at 2 AM — and if so, how did the property manager handle it?” With tenants ask “have you ever been without heat at 2 AM — and if so, how did the property manager handle it?” If those questions don’t have answers, think of other unique ones.

    A good property manager will call an HVAC company at 2 AM and pay astronomical emergency rates. A great property manager will take the tenant space heaters and call the HVAC guy the next day. Not only do you, the owner save some money, the tenants are happy and warm, too.

    Finally, get a copy of the property management agreement and lease early on. If they won’t provide you with example copies then move on. I am amazed at how many companies use a one or two page property management agreement. We use a 12 page property management agreement. EVERYTHING IS SPELLED OUT IN THAT DOCUMENT SO THERE ARE NO QUESTIONS! The same is true with our 11 page lease — no questions are left unanswered.

  6. Can anyone please send me some advice and encouragement. I believe I am being squeezed by my property manager into a situation where I will be forced to sell my house to the current tenant. I am not a real estate investor and I truly wanted to retire in this house but since my work is 800 miles away I entrusted my property to a property management firm. I have had several suspicious repairs costing close to $8000 for my $900/month house. Now the tenant owes back two months back rent with two more months to go on the lease. The manager admitted he knows the tenant. I am in a terrible bind with medical bills and a dying father that I would like to visit overseas. I could sell the property but I am afraid that I will be severely lowballed and defrauded with the home inspection. Any advice will be welcome.

  7. Jim,

    As a property manager I can see where this situation is going. Your property manager will not start the eviction process because it looks like he and the tenant know each other. I would recommend trying to get out of your contract with the property manager. Also did you sign a contract giving him the authority to make such costly repairs? Often times as a property manager you are solicited by contractors looking for work, in exhange they give you a referral fee. This might be tempting for your property manager since it is not out of his pocket. I would look at the invoices and also see if he took any other bids for the “necessary” work.

  8. personally i try to avoid property managers or letting agents as we call them in the UK. i believe if you are investing in property you should do it locally where you are familiar with the market and have the benefit of being easily able to oversee maintenance issues.

  9. Not all project managers are like that thought and I can completely agree with you that if a manager gets hands on in a project then there is normally a good outcome but I feel your anger as I have had it happen to me on many occasion, now I just stick to local property and know the market instead of handing it off to others.

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