Property Management Woes

[Michelle Cohen]

I own a triplex in Cleveland, and it's my first investment property. We closed mid-January. I posted before about our terrible property management company. That was in March. In May, it was acquired by another well-known (at least in that area) real estate company that has a property management division. We went into the new company with two units rented and one unit vacant. 

It's been a hassle since the beginning, but the last 6-8 weeks have really taken the cake. We have an agent, who I'll call Kate, and her manager, who I'll call Mary. 

We have been waiting on several estimates for services (a washer/dryer hookup and also lead mitigation... we failed the required lead test) since the end of July. We also still have no tenant in that vacant unit; Kate claims she's showing it all the time and that people love it, like the location, like the size, like the price, but they just don't put in an application. I've asked her several times if we should reduce the price, and each time, she says no, let's not.

Kate does not return calls/texts/emails UNLESS we call Mary to complain. Then Mary, who won't return phone calls herself, apparently tells Kate to contact us and we  get halfway answers. The answers since the end of July have been a lot of "I don't know why we don't have an estimate yet. I called the lead company and didn't hear back. I can call them again. Idk why we aren't getting applications. The contractors must all be busy. I don't know, I don't know, I don't know." So maybe we'll text her on a Monday, call on a Tuesday, email on a Wednesday, wait til the following Tuesday to complain to Mary, then Kate will miraculously email with her "IDKs" on Wednesday. This has been a pattern for about two months now.

In the meantime, they're having no problem getting people out there to make random fixes to things like "a door broke (and costs $110 to repair)" and "a male adaptor had to be replaced (for $280)." (A male adaptor for what? "I don't know.") We've repaired more doors in this house in 8 months than we've repaired in our 15 years of owning our own home.

We asked Mary for itemized invoices... mainly because we've already had some charges that were duplicate, triplicate, or not even belonging to our property!! Have we received these invoices? No, we have not.

We have gotten about $500 in payouts since May. The rent for the two apartments that are filled is $1,645 in total.

Are we just way out of our minds on expectations, or did we seriously just get a complete lemon of a property manager in less than 8 months? My husband is extremely hesitant to go to a different company because now he thinks they're all like this. We aren't sure if we're up for self-managing, mainly because we haven't done it before. For the amount of follow-up this requires, though, I can't imagine it would be more work than it currently is, dealing with an incompetent PM company. If this is par for the course, maybe it's best to just sell it and call it an expensive lesson learned....

[Jad Boudiab]

Quote from @Michelle Cohen:

I own a triplex in Cleveland, and it's my first investment property. We closed mid-January. I posted before about our terrible property management company. That was in March. In May, it was acquired by another well-known (at least in that area) real estate company that has a property management division. We went into the new company with two units rented and one unit vacant. 

It's been a hassle since the beginning, but the last 6-8 weeks have really taken the cake. We have an agent, who I'll call Kate, and her manager, who I'll call Mary. 

We have been waiting on several estimates for services (a washer/dryer hookup and also lead mitigation... we failed the required lead test) since the end of July. We also still have no tenant in that vacant unit; Kate claims she's showing it all the time and that people love it, like the location, like the size, like the price, but they just don't put in an application. I've asked her several times if we should reduce the price, and each time, she says no, let's not.

Kate does not return calls/texts/emails UNLESS we call Mary to complain. Then Mary, who won't return phone calls herself, apparently tells Kate to contact us and we  get halfway answers. The answers since the end of July have been a lot of "I don't know why we don't have an estimate yet. I called the lead company and didn't hear back. I can call them again. Idk why we aren't getting applications. The contractors must all be busy. I don't know, I don't know, I don't know." So maybe we'll text her on a Monday, call on a Tuesday, email on a Wednesday, wait til the following Tuesday to complain to Mary, then Kate will miraculously email with her "IDKs" on Wednesday. This has been a pattern for about two months now.

In the meantime, they're having no problem getting people out there to make random fixes to things like "a door broke (and costs $110 to repair)" and "a male adaptor had to be replaced (for $280)." (A male adaptor for what? "I don't know.") We've repaired more doors in this house in 8 months than we've repaired in our 15 years of owning our own home.

We asked Mary for itemized invoices... mainly because we've already had some charges that were duplicate, triplicate, or not even belonging to our property!! Have we received these invoices? No, we have not.

We have gotten about $500 in payouts since May. The rent for the two apartments that are filled is $1,645 in total.

Are we just way out of our minds on expectations, or did we seriously just get a complete lemon of a property manager in less than 8 months? My husband is extremely hesitant to go to a different company because now he thinks they're all like this. We aren't sure if we're up for self-managing, mainly because we haven't done it before. For the amount of follow-up this requires, though, I can't imagine it would be more work than it currently is, dealing with an incompetent PM company. If this is par for the course, maybe it's best to just sell it and call it an expensive lesson learned....

 Hi Michelle, sorry to hear about your struggles with your current PM team. As a local property manager, investor, broker, I know this business is challenging, but it does not justify the level of service you're receiving.

It sounds like you're dealing with a team that either does not have enough systems in place to properly manage at scale, or they're overwhelmed with their current volume leading to a terrible service. Having built a management operation, been there done that, I can tell you change does not come quick, it will take a long time for the operation to iron itself out. You're better off making a switch to a new PM.

To have a successful switch, it's important to go into meetings with new PMs with the mindset of vetting them first, then giving them your problems / challenges to see how they can solve them. A lot of times a PM sales team will immediately come up with a solution for you current pain point, but doesn't exactly have a system or solution to fix it. This gets missed by investors.

I also noticed you're in talks with Josh on my team about potentially moving over to our firm. Just as I suggested above, and certainly Josh would know this, but try to ask him (or anyone you interview) about how exactly the team can solve your problem. What systems are ALREADY in place to fix your (leasing and communication noted above) challenges. Not what systems they will put in place soon or what method they will attempt to use to resolve your problem.

Shameless plug, we're a member of NARPM and limit our individual team members to 45-50 units max so they can keep up with the service quality. You don't get one or two receptionists to respond to all 3-400 owners like in some cases. But I highly recommend whomever you speak with, you ask about the team size, each team member's unit count and bandwidth. This is something professional PM companies track, and is a significant factor in the capacity / quality of service portion of the operation.