Property Management in Arizona
Investor · austin, TX · Member since 2015 · 33 posts · 13 votes
Property Management in Arizona
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Josh YoungPro Member
Rental Property Investor / REALTOR® / Property Manager · Gilbert, AZ · Member since 2023 · 384 posts · 421 votesHaving an LLC won't necessarily help you with problem tenants. The best thing to do is have proper screening processes in place to help reduce the potential for problem tenants. I would think that self managing from out of state would make it very difficult to meet potential applicants and to do showings, it could also make it more expensive to handle maintenance requests if you don't have boots on the ground. Have you only tried big management companies or have you considered using a small property manager that is also an investor?
6 Replies
- Realtor · Atlanta, GA · Member since 2021 · 239 posts · 120 votes1y
Hey @Ashley Chris! It depends on what you're trying to accomplish. If your goal is asset protection and limiting liability then just putting the LLC in your wife's name may not necessarily shield you, especially if you're still actively involved in managing the property. Courts will look past LLC ownership if they determine it's just a workaround for personal liability (ie. "piercing the corporate veil").
Instead, you might want to speak with a real estate attorney or entity structuring specialist who can help you set it up correctly. Someone like that can help set your entity up to provide the protection you're looking for.
Another thing to think about is that managing your own properties under an LLC may require you to follow property management laws in Arizona. Something to double-check before moving forward.
- Investor · austin, TX · Member since 2015 · 33 posts · 13 votes1y
Hi @Lateefah Mathews
Can you refer to me to any real estate attorneys or entity setup specialists.
Thanks
Quote from @Lateefah Mathews:
Hey @Ashley Chris! It depends on what you're trying to accomplish. If your goal is asset protection and limiting liability then just putting the LLC in your wife's name may not necessarily shield you, especially if you're still actively involved in managing the property. Courts will look past LLC ownership if they determine it's just a workaround for personal liability (ie. "piercing the corporate veil").
Instead, you might want to speak with a real estate attorney or entity structuring specialist who can help you set it up correctly. Someone like that can help set your entity up to provide the protection you're looking for.
Another thing to think about is that managing your own properties under an LLC may require you to follow property management laws in Arizona. Something to double-check before moving forward.
- 1yJosh YoungPro MemberRental Property Investor / REALTOR® / Property Manager · Gilbert, AZ · Member since 2023 · 384 posts · 421 votes
Having an LLC won't necessarily help you with problem tenants. The best thing to do is have proper screening processes in place to help reduce the potential for problem tenants. I would think that self managing from out of state would make it very difficult to meet potential applicants and to do showings, it could also make it more expensive to handle maintenance requests if you don't have boots on the ground. Have you only tried big management companies or have you considered using a small property manager that is also an investor?
- 1yDoug McVinuaPro MemberProperty Manager · Queen Creek, AZ · Member since 2016 · 608 posts · 426 votes
I see two parts to your question:
Part 1 concerns putting the property in an LLC to protect other assets. Many attorneys recommend this path; a properly set-up and administered LLC can offer good protection. However, a poorly set-up or administered LLC seems easy for attorneys to break and may not provide you the desired benefits.
Part 2: Property Management: In Arizona, you are permitted to manage your own properties. If you want to start managing for others, you then need a Real Estate Broker and will need to structure and set up per the Arizona Department of Real Estate.
There are many different property managers to choose from, and there are some good ones in Arizona. Not every property is a good fit for every property manager, and not every owner is a good fit. You can find one that fits your needs. I have many friends in the business. Some operate similarly to the way I do, and others have a very different model. They aren't wrong or necessarily bad; it's just a different way of doing business than we have.
- 1yPatrick O'SullivanBusiness MemberProperty Manager · Phoenix, AZ · Member since 2024 · 529 posts · 202 votes
Hi Ashley, great question—and I can definitely understand your frustration.
Forming an LLC can offer a layer of protection, but like others have mentioned, simply putting it in your spouse's name might not shield you from liability if you're still actively involved in management. Courts can and do "pierce the veil" if the LLC isn't properly maintained or is clearly being used just to avoid liability.
One thing to be mindful of: Arizona has specific requirements for property management. If you're managing your own properties, you're generally allowed to do so without a real estate license. But if your LLC starts managing anyone else’s, even just on paper, you’ll likely need to be a licensed broker or hire one.
Also, self-managing from out of state can be tricky—especially when it comes to tenant screening, maintenance, and legal compliance. If you haven’t already, it might be worth looking into smaller, investor-friendly property managers. Sometimes they offer more flexibility and better communication than larger firms.
And as always, it's a good idea to check in with a local real estate attorney to make sure you're structuring things properly based on your specific goals.
Hope that helps—and best of luck getting everything dialed in!
get MULTIfamily Property Management4.7220 Reviews - 1yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Ashley Chris how well did you actually screen the PMC(s) you hired?
How much time did you spend asking questions about HOW they perform their services?
Owners should screen PMCs BETTER than tenants are screened!
Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.
Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.
Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.
To avoid going through the same poor experience, keep reading.
Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
Logical Property Management4.9453 Reviews
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