Seeking Advice on Property Management Issues for Out-of-State Real Estate Investment

[Luca Giani]

Hi everyone,

I'm a real estate investor based out of state and I'm currently facing some challenges with my property manager. I would really appreciate any advice or insights from those who have been in a similar situation.

This is our second investment property, and the first one is also managed by the same property manager. The process for the first property was super smooth, which is why we chose to work with them again. However, this time around, things have not been going as well.

Six months ago, I entrusted my property manager with hiring contractors and obtaining the necessary permits to get my property rented. Unfortunately, the process has been much slower than anticipated, and we are still not ready to list the property.

Additionally, the costs have significantly exceeded our initial expectations, and the property manager has not been very responsive or clear about why this is happening. Communication has been a major issue, and I'm finding it difficult to get timely updates or clear answers from them.

Given these challenges, I am losing faith in their ability to manage the property effectively and am seriously considering switching to a new property manager.

Has anyone experienced similar issues? How did you handle it? What steps would you recommend I take to address these problems and ensure my investment is managed properly? Any advice on how to find a more reliable property manager would also be greatly appreciated.

Thank you in advance for your help!

[Jaron Walling]

@Luca Giani How far away are you from the property? What other boots on the ground can do inspections or meet with contractors? It's not like you have 50 doors. The communication (lack there-of) with the PM is an issue but I'd travel there myself and see what's completed. 

Unless the other unit has run smoothly for years I'd be meeting with another PM as well. Communication, photos, and documentation is everything in this business. 

[Adam Bartomeo]

Communication is the number 1 complaint about property managers, so, the majority of investors have dealt with this. You are going to have to hound them until they respond. In the beginning, giving them 24 hrs to respond is ok but if they are taking longer than that you may want to increase the communication. As far as the rehab costs and timelines, we would need more information. It is typical for the costs to be higher and the timeline extended. We would need to know the "whys". Why is it taking longer, why is it more expensive. 

Also, I doubt you can just switch PM's. You are probably in a contract and need to abide by that contract.

[Kerlous Tadres]

Quote from @Luca Giani:

Hi everyone,

I'm a real estate investor based out of state and I'm currently facing some challenges with my property manager. I would really appreciate any advice or insights from those who have been in a similar situation.

This is our second investment property, and the first one is also managed by the same property manager. The process for the first property was super smooth, which is why we chose to work with them again. However, this time around, things have not been going as well.

Six months ago, I entrusted my property manager with hiring contractors and obtaining the necessary permits to get my property rented. Unfortunately, the process has been much slower than anticipated, and we are still not ready to list the property.

Additionally, the costs have significantly exceeded our initial expectations, and the property manager has not been very responsive or clear about why this is happening. Communication has been a major issue, and I'm finding it difficult to get timely updates or clear answers from them.

Given these challenges, I am losing faith in their ability to manage the property effectively and am seriously considering switching to a new property manager.

Has anyone experienced similar issues? How did you handle it? What steps would you recommend I take to address these problems and ensure my investment is managed properly? Any advice on how to find a more reliable property manager would also be greatly appreciated.

Thank you in advance for your help!

I would look into other property managers that help out of state investors. I have not been in this situation, but I would do your research and find someone that you can trust even if it means flying into the state and interviewing the property managers yourself. Losing money is not fun and it sounds like you have to go get it situated before you keep bleeding money and not knowing where your money is going

[Dennis McNeely]

You may need another team member - someone to manage your construction. Your property manager's comfort zone apparently doesn't extend to the larger project you'd like them to take on. As much as they'd like to keep all your local property-related business, property management and construction management are two different beasts. Finding someone with that aptitude may resolve the problem.

If you can open the line of communication once again, have a conversation and find out if they're capable of finding a general contractor to wrap things up. If they're unwilling or unable to do so, take that task on yourself.

Assuming you can clear the air, let them continue doing what they've done well for you in the past - property management. If they won't respond so you can have the conversation about finding a GC, it's time to move on, and find someone to replace them as property manager.

Hopefully you'll be able to put a period at the end of the sentence without too much pain - either financially or in the form of further delay.

[Luca Giani]

Thanks for the reply.

I live in the Los Angeles area (Orange County to be precise). So far away. We got to a point we need to ask for other professionals to evaluate our position. 

[Luca Giani]

Thanks for the feedback!

Quote from @Dennis McNeely:

You may need another team member - someone to manage your construction. Your property manager's comfort zone apparently doesn't extend to the larger project you'd like them to take on. As much as they'd like to keep all your local property-related business, property management and construction management are two different beasts. Finding someone with that aptitude may resolve the problem.

If you can open the line of communication once again, have a conversation and find out if they're capable of finding a general contractor to wrap things up. If they're unwilling or unable to do so, take that task on yourself.

Assuming you can clear the air, let them continue doing what they've done well for you in the past - property management. If they won't respond so you can have the conversation about finding a GC, it's time to move on, and find someone to replace them as property manager.

Hopefully you'll be able to put a period at the end of the sentence without too much pain - either financially or in the form of further delay.

[Luca Giani]

Thanks!

Quote from @Kerlous Tadres:

Quote from @Luca Giani:

Hi everyone,

I'm a real estate investor based out of state and I'm currently facing some challenges with my property manager. I would really appreciate any advice or insights from those who have been in a similar situation.

This is our second investment property, and the first one is also managed by the same property manager. The process for the first property was super smooth, which is why we chose to work with them again. However, this time around, things have not been going as well.

Six months ago, I entrusted my property manager with hiring contractors and obtaining the necessary permits to get my property rented. Unfortunately, the process has been much slower than anticipated, and we are still not ready to list the property.

Additionally, the costs have significantly exceeded our initial expectations, and the property manager has not been very responsive or clear about why this is happening. Communication has been a major issue, and I'm finding it difficult to get timely updates or clear answers from them.

Given these challenges, I am losing faith in their ability to manage the property effectively and am seriously considering switching to a new property manager.

Has anyone experienced similar issues? How did you handle it? What steps would you recommend I take to address these problems and ensure my investment is managed properly? Any advice on how to find a more reliable property manager would also be greatly appreciated.

Thank you in advance for your help!

I would look into other property managers that help out of state investors. I have not been in this situation, but I would do your research and find someone that you can trust even if it means flying into the state and interviewing the property managers yourself. Losing money is not fun and it sounds like you have to go get it situated before you keep bleeding money and not knowing where your money is going

[Bryan Montross]

I don't think I am going to say anything too different from the previous posts because they all answered really well. I do agree that you need to go in person to see what is going on. It's a choice we make when we invest out of state that we may have to take time off from other things to check on our properties (and managers). Let the property manager know when you are coming, that you want to see the property, and that you want to talk with them. While there make sure you spell out expectations and put it in writing. If they are not willing to meet your expectations, you need a new PM.

Another thing that others have alluded to is that a property manager is not always the best at managing a rehab project. It may not mean they bad at property management, so maybe you are asking them to do something they don't really know how to do. It might be worth exploring options for someone else to manage the rehab and for them to just manage the property once it is ready to be rented.

Stay on top of things and don't let it get out of control. You need to be able to manage the property managers if you are going to be successful with out of state investing.

[Drew Sygit]

@Luca Giani We manage many properties in Warren, MI so it'd be to our benefit to "roast" a competitor to try to get your business.

We've got more integrity than that though!

It's difficult to really comment and address your concerns without more info. 

What is the Scope of Work (SOW)?
- Depending on how long it is, it may be the cause of the delays.

What info are they sharing about city inspection results?
- Warren inspectors can be a PAIN!

How are you funding approved work?
- We often have clients wait weeks to send us funds, then expect us to start the next day. Our maintenance staff is busy, they're not sitting around waiting for funds, so we have a queue.

Is the property occupied by tenants?
- Tenants can be unbearable with delays for access to make repairs:( Often they play games with repairs, so they don't have to pay rent.

How have they been communicating? Have they been proactive and explaining the delays?

DM us if you'd like to chat more.

[Sean O'Keefe]

@Luca Giani we work with a lot of real estate investors some in Michigan, that provide us with a lot of intel on who the great property managers are, and well, aren't.

Feel free to reach out if you are looking for unbiased feedback on PMs in your area. 

I also found this thread from @Bob Beach helpful. He touched on a couple of similar issues and DM'ed me some more helpful feedbackl.

[John Morgan]

Can you self manage to save you all the headaches? I self manage 8 SFR out of state and it's easy. If something breaks, I just text someone to go out and fix the issue. It's pretty easy to do.

[Danny Rodriguez]

Everyone has given good advice. This is a live and learn type of business. At least you’re taking action and not just reading tons of books and consuming podcasts. You’re taking on challenges, getting frustrated and learning Cayla le lessons that will help you grow stronger 👍🏼

[Sean O'Keefe]

Quote from @John Morgan:

Can you self manage to save you all the headaches? I self manage 8 SFR out of state and it's easy. If something breaks, I just text someone to go out and fix the issue. It's pretty easy to do.

@John Morgan has a point. 
@John Morgan what PM software do you use to self-manage properties? 

[John Morgan]

Quote from @Sean O'Keefe:

Quote from @John Morgan:

Can you self manage to save you all the headaches? I self manage 8 SFR out of state and it's easy. If something breaks, I just text someone to go out and fix the issue. It's pretty easy to do.

@John Morgan has a point. 
@John Morgan what PM software do you use to self-manage properties? 

I just sort of wing it. I did put two of my tenants who are always late and don’t pay me late fees on apartments.com so they’re collecting the late fee for me if they don’t pay by the 5th. And I feel like I’m not chasing them around for rent. I email them leases and collect money on any free cash app of their choice. 

[Denis Ponder]

Quote from @Luca Giani:

Hi everyone,

I'm a real estate investor based out of state and I'm currently facing some challenges with my property manager. I would really appreciate any advice or insights from those who have been in a similar situation.

This is our second investment property, and the first one is also managed by the same property manager. The process for the first property was super smooth, which is why we chose to work with them again. However, this time around, things have not been going as well.

Six months ago, I entrusted my property manager with hiring contractors and obtaining the necessary permits to get my property rented. Unfortunately, the process has been much slower than anticipated, and we are still not ready to list the property.

Additionally, the costs have significantly exceeded our initial expectations, and the property manager has not been very responsive or clear about why this is happening. Communication has been a major issue, and I'm finding it difficult to get timely updates or clear answers from them.

Given these challenges, I am losing faith in their ability to manage the property effectively and am seriously considering switching to a new property manager.

Has anyone experienced similar issues? How did you handle it? What steps would you recommend I take to address these problems and ensure my investment is managed properly? Any advice on how to find a more reliable property manager would also be greatly appreciated.

Thank you in advance for your help!

I purchased a property in Warren and had to switch PMC's about 6 months in.  Best decision I made.  I spent more money for the original PMC to manage an empty rental than my current PMC (Logical Property Management) costs to manage an occupied rental.  Plus a really nice upgrade in communication as well!  I highly recommend considering Logical Property Management!  Happy to share more in PM if you like.