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4 Signs You Need to Ditch Your Property Manager

Here’s the Big Red Flags to Look Out For

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A lot of people are very intimidated from the idea of getting into real estate investing. Often they are afraid that it will be too much of a headache when they have to deal with “tenants and toilets”. Though, there’s a simple solution to that: hire a property manager.

At their core, property managers are hired to do nearly every task that is required of a landlord. This includes accepting applications, screening potential tenants, hiring contractors for repairs, and conducting annual/semi-annual inspections — just to name a few.

Still, not all property managers are created equal.

Being in this business for as long as I have, I’ve had the opportunity to work with some great property managers and some pretty bad ones.

Whether it’s from incompetence or malicious intent, here are 4 giant red flags that you’ll find bad property managers waving.

#1 They Don’t Call You Back

This might seem pretty straightforward but if you try to call your property manager and they don’t return your call — run away as far as you can, as fast as you can.

I’m a millennial myself and I know my generation has been known to be averse to phone calls. I believe that really is true, but it’s also true that there are just some things that you need to talk to an actual person for.

I expect my property manager(s) to return my calls by the end of the business day on the same day, barring any extenuating circumstances of course.

If it becomes a regular occurrence that I don’t hear from them for several days, or even weeks after my inquiry, then we have a BIG problem. They’re being unreliable — and it’s so unprofessional.

If they don’t shape up and do their job, they’re fired.

#2 They Talk To You Like They Are The Boss

There is a first for everything apparently, but I’ve only just experienced this for myself.

Most people who work for property management companies understand the relationship dynamic of a landlord and a property manager:

A landlord hires a property manager that works for them — not the other way around.

Apparently the associate at the company I’ve been using for several years now didn’t catch the memo.

Yep, they’ve been giving me orders on actions to take with my property — orders that are not even required by state or federal law.

For example, this time they’d gone behind my back and sought a $1300 quote for landscaping. They’d then told me I had to improve the landscaping — that it was my responsibility as a landlord.

I immediately reached out to the owner of the company and cc’d him on my emails with my assigned property manager.

The PM as it turns out broke our agency contract. They are not allowed to tell me what to do or give me orders, and they must discuss what actions I would like to take when required repairs — not improvements — are estimated to be over $300.

Beautifying a property with extensive landscaping isn’t even in the lease that was drawn up and signed by our tenants. After all, why would it be? That’s not normal.

What is normal in my market area? Tenants are responsible for basic yard maintenance, including weeding and mowing.

The company’s owner reminded the PM that my responsibility as a landlord is to keep the property safe and livable for my tenants. They also reminded them that cosmetic improvements are optional, and I give the orders.

If the property manager can’t toss the entitled power-trip, then it’ll be time to say “good riddance”.

#3 They Don’t Inspect The Work That They Hire Out

Inspect what you expect!

That’s an old saying I picked up as an assistant manager while working in retail many years ago. It’s also relevant to just about every single industry out there — including real estate.

A good property manager will inspect what they expect from the contractors that they hire to do repairs on the homes that they are managing.

Likewise, a bad manager will just assume that the job was done and never check in on it at all.

I think you can see how that would cause problems.

I’ve unfortunately dealt with this scenario more than once, and a property manager’s negligence can actually cause physical damage to your property.

If your property manager is causing more harm than good, then it’s time to go your separate ways.

#4 They Aren’t Keeping Your Financial Interest In Mind

Different states have different real estate laws. In Washington state — where I am located— a real estate license is required to perform property management duties.

As a licensed real estate agent, per law, property managers are fiduciaries to their clients.

This means that property managers are bound by law to keep your best interest in mind. They cannot take actions that will harm your assets or your financial well-being, and they can be held legally liable for acting against your best interest.

(The scenario I wrote about in #2 is one such example of this.)

It’s important to know your rights and responsibilities as a landlord, that way you can better protect yourself — and maybe even your tenants — if a property manager attempts to take advantage of you.

Conclusion

Despite what you read often, real estate is not “passive income”. It has the potential to be semi-passive, but there will always be a certain level of work for you to do.

Property managers are supposed to make the job easier, but that’s not always the case. Property managers are just people and people are good, bad, diligent, and lazy.

You need to interview the property manager that you hire and you need to inspect what you expect of them. If they aren’t up to the job or they deceive you in any way — toss ’em and find a good one instead!

This article was originally published on OhHeyItsRay.com

Oh Hey, It’s Ray is a real estate investor, entrepreneur, and former real estate agent. She lives happily with her husband and two children in the Pacific Northwest. See more from Ray at her YouTube channel and on Ohheyitsray.com