How To Protect Yourself from Property Management Nightmares

Posted on 13. Sep, 2011 by in General

As active real estate investors, our experience is fraught with bad experiences with difficult property managers. When you find a good property manager, it’s like finding gold – you need to treasure them and look after them, they are a precious commodity.

It’s easy to think that because you hire a property management company to manage your properties, your worries are over.  Far from it.

By hiring a property manager you have minimized the time it will take to oversee the property – you will avoid dealing with tenants, collecting rents, paying bills, dealing with repairs and maintenance.  But there is one crucial job you cannot avoid – managing your manager.  So many investors avoid doing this, putting all their faith and trust into their manager – only to find, either through laziness or sheer incompetence – that the manager is no longer managing the property efficiently or effectively.

Here are a few marks of a bad property manager – look out for them

1.  Failure to keep the property full

2. Failure to collect rents

3. Failure to properly screen tenants

4. Higher than usual expenses

5. Not telling you about expenses

6. Poor/difficult tenant relations

7. Poor follow up on requests tenants make

8. Slow to prepare property for rental

9. Higher than usual evictions

The list could go on and on – but I figure you get the idea.

Bad management companies are exceptional at spinning great excuses. Don’t listen to them. Do your own investigations. There may be a genuine excuse, but often there is not. Check references, visit other properties the company manages and speak to tenants if possible.

How about writing in a 30 day clause in your management agreement that gives both you and the management company a 30 day notice to cancel the agreement? You’ll find that a lot of management companies will request you commit for a one year term – don’t do it.  Write a 30 day option in your contract, get both parties to sign it – if they won’t,  look for another manager.

YOU rely on cash flow to run your business, if you are not getting it, your business will suffer.  Choose your property manager with care and attention.

And to all you wonderful property managers out there – keep up the really great work because we need and rely on you to successfully run our businesses.

To Your Investing Success,

Jane

 

 

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