Your property is your greatest investment. You need someone who will manage it well.
If you own rental property, you’re aware of how significant that investment can be in both time and money. As a source of income, it can be highly lucrative, but only in the right hands.
Many property investors don’t feel qualified to manage their property themselves. They may have enough capital to acquire real estate, but their expertise lies elsewhere. In these instances, they rely on others to manage the property for them. If the relationship works well, then the property owner benefits from having a qualified intermediary between them and their tenants, and the property manager gains a certain percentage of the rent profits in exchange for filling the space, working with tenants, and maintaining the building.
However, sometimes a property manager isn’t able to do their job well—or, in the very worst cases, they may even prove to be untrustworthy. When this happens, the property owner can lose a lot of their investment. If you’re concerned about a bad property manager, here are six signs you may need to switch.
Your vacancy rate is high, or your rent income is low.
Finding tenants to fill a space can be challenging, particularly in a tough economy. And sometimes, in order to close a deal, property managers need to offer more favorable terms. Finding the balance between filling a space and leasing it for under market value requires careful negotiation, and not all property managers are cut out for that.
If your space remains vacant for too long, or if income from that space is below comparable spaces in your area, it could be an indication of negligence on the part of your property manager.
They’re not properly qualifying tenants.
A bad tenant causes more problems than late rent. They can damage property, alienate their neighbors, and even cause legal trouble. That’s why the vetting process for tenants is so crucial: vacancies need to be filled, but only by qualified tenants.
The vetting process should be thorough. When a tenant applies for a space, their application should include various forms of identification (SSN, driver’s license), proof of income, and references from employers and/or prior landlords. Landlords may then interview tenants and should contact their references to be sure the information provided is accurate.
However, a bad property manager may try to cut corners, hoping they’ll get lucky and the new tenant will work out. Sometimes they do, but if they don’t, the property manager will probably spend more time dealing with the bad tenant than they would have spent had they done the work up front.
You notice a pattern of tenant complaints.
Vetting tenants and collecting rent is only part of a property manager’s job. They’re also responsible for handling any problems the tenants might have with their space, including maintenance and repairs. When a property manager handles these issues in good order, then there shouldn’t be a problem. But if they start dragging their feet, then frustrated tenants may try to bring their complaints elsewhere—to you, or possibly to court.
Of course, a single angry tenant isn’t a sign that a property manager is doing a bad job. But a series of issues with tenants is an indication that the property manager either isn’t handling the qualification process well enough or isn’t holding up their side of the lease agreement.
Your maintenance expenses are rising.
When a property is well cared for, maintenance issues are handled proactively. The property manager conducts regular reviews of the space and knows how long various assets will last. More importantly, they understand that the longer an issue goes unaddressed, the more likely it is to cause problems down the line.
When issues do arise, some property managers will try to patch it over, or opt for a cheaper solution to avoid large expenses in the short term. Unfortunately, quick fixes are more likely to fail early, forcing the property manager to continue pouring money into the problem.
You don’t receive regular property inspection reports.
If you live in the area, you’re probably used to driving by your property and inspecting the outside every once and a while. But if you live farther away, you probably rely on your property manager to give you updates as to the condition of your property, and these updates should be regular and thorough.
Of course, it’s the property manager’s duty to conduct internal inspections of the rental space as well—usually on an annual basis. If these reports don’t come through, or if they’re vague and lacking in enough detail, it could mean that either your property manager isn’t conducting the inspections properly, or they’re leaving important information out of their report.
They don’t communicate well.
Your property manager should be immediately available to respond in case of an emergency, or they should have someone on staff who can respond if they are not personally available. For less critical issues, their response time should be prompt, and you should never feel as though you are being rushed or cut short in your conversations.
An evasive property manager is a cause for concern. Similarly, a manager who fails to be fully transparent in their interactions with you, who dismisses your concerns, or seems to place you at the lowest priority is not someone you want to do business with. If you can’t communicate clearly and efficiently with your property manager, it’s time to move on.
What’s causing you to consider a new property manager?
If you’re thinking of switching property managers, that could be its own warning sign. If the person or company currently caring for your property is doing a good job, there’s little reason to consider a switch. However, if you are unhappy with your property manager, it’s usually for a reason.
Unease or lack of confidence are just as legitimate of reasons to switch property managers as what we’ve listed above. If you feel your property manager isn’t doing their job correctly, it’s time to look for someone new. After all, your property is one of your most valuable investments. You want to leave it in hands you trust.