Bad Property Managers and Mistakes We Made

Posted on 04. Jul, 2011 by in General

Bad property managers cost good people time and money.

Issues with Property Managers is a common occurrence not only with novice investors but experienced ones too.  We are still picking up the pieces from a very bad experience we had with an out of province Property Manager.  It turned out to be an incredibly costly, stressful and time-consuming process that set our real estate investment goals back several months.

Initially our PM seemed great, he came with a great reputation, impeccable references and an extremely professional demeanor. Where did it all go wrong?

Looking back, it’s easy to see where cracks started to appear.  We took our eye off the ball, so to speak.  We put far too much trust in what our Property Manager told us.  It certainly didn’t help that the property was in another city, in another province. The first warning sign was when the once monthly statements became more and more infrequent. Excessive charges began to be applied to our account, some for regular maintenance work, other charges for miscellaneous services such as the time a hefty  snow removal charge was applied when it hadn’t snowed for weeks.  Rental cheques got later and later and vacancies took longer and longer to fill.

Looking back, we ask ourselves what we could have done differently? Without a doubt, we cut corners on our due diligence. We should have put more time and effort into the due diligence that is required when hiring a good PM – it’s just as important as the due diligence required when purchasing the property.   It was up to us to put strict processes in place to manage our Property Manager.

Communication is a certainly a big part of the process. Once we realized that his performance was not improving, and there was a continued lack of responsiveness from him, we should have taken immediate action.  We put ourselves in a position that ended up costing us a lot of money.

Don’t make the same mistakes we made. Keep in touch with your Property Manager often enough for them to know you – that’s at least every month.  Put your requests in writing. Make sure they’re not on auto-pilot when things are going wrong. Be brutally honest with them and let them know you’re on the ball. Good Property Managers find great tenants, report back to you regularly, conduct business efficiently and ensure you make as much profit as possible. When you find one, not only will you stand to reap all the benefits of property investing, you’ll dramatically increase your peace of mind.

We learned lessons the hard way but it has certainly made us more vigilant.  We continue to work with PM’s who manage various parts of our portfolio – when they are good they are very, very good. Despite having difficulty with one PM, we have made up for it with the awesomeness of our other PM’s.

Have a great week,

Jane

 

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