Having a hard time finding property management

[Josh Falls]

We have a 110 unit complex in a medium sized town in Illinois. The current management had had it a year and done a great job. Now they say they have too much business to keep our complex. The other prominent company in town is telling me the same thing. Is this a typical problem in that area of the country? We don’t have this issue in the South at all.

[Fleming Schutrumpf]

I would agree that this is a challenging topic. It's also not one to take lightly. Finding a property manager is almost like deciding who to marry. They will have access to all your rents, they may insist on holding your security deposits, and they get to tell you what repairs were done, and bill you for those, whether or not there was an actual repair. 

I've used 5 property management firms in the past, and now self manage. 

Like a romantic relationship (or my first marriage) they all started out great. Then they slowly slipped. 

Here's why. Being a property manager is rough. Calls at all times, concentrated around holidays and your "days off". Ungrateful tenants and demanding owners. And, the temptation of easy money. It's too easy to fabricate a $350 furnace repair and take your 8% management commission to a nice 40% that month. After all, you earned it being out there a 11pm helping that locked out tenant last Monday.... That's how property managers often think. I've heard the stories: the friend who dated the owner of a property management firm, and picked her up at the office to take her for a drive in his convertible. The conversation he overheard: Girlfriend to assistant: "How much collected on Davidson St this month?" Assistant: "$1150." Property management owner Girlfriend to assistant: "bill them $350 for a furnace repair and send them the balance."

SImilarly, a coworker who has an out of state rental about 25 minutes from his dad's house had this: his dad was in the neighborhood and cleaned the gutters for his son.  Thanks Dad!  The following month's property management bill had a $75 gutter cleaning charge.... You can't escape this, and my rentals were all in town. 

I have worse stories, my property manager, Chip, stole $14,000 in security deposits. He also let Xcel bills in my name accumulate unpaid to around $5,000 or so. I reported him to the real estate commission. They fined him some amount, the original fine was $5000, he negotiated it to a lesser amount. The key was that the government agency that I thought was my advocate didn't do anything to get me my money back, instead they took my money from Chip so that he was even less in a position to pay me back. He never did. 

So shop around, monitor carefully. Ramp up your monitoring over time, even as your instinct is to trust that they have proven themselves. Possibly self manage at first, to get a feel for the types of calls and their frequency. I used to work full time and had a property manager until I had a portfolio that allowed me to be a full time investor. When I fired my last property manager (for dishonesty and theft), I realized that all their whining and complaining about how much work it was, was mostly BS. The work isn't that hard, and it's not that much. I do the maintenance anyway, they were just the conduit of information. 

I have also learned to create systems to lower turnover and pick better tenants, and to keep my properties in good shape so maintenance emergencies are infrequent. I sleep better, have more loyal, happy, appreciative tenants, and I make more money on top of it all. 

WIshing you much luck in your investing!!!