how to fire your property manager?

Question

I need advice.  Should I fire my property manager ASAP?

In my first 8 months of real estate investing, I had the unfortunate experience of my first eviction.  This property (Indianapolis) was my best cash flowing property due to it being a duplex until about 4 months into the first lease, the tenant stop paying the rent.  This tenant was put into place by my current property manager.

Eviction started in 8/2014.   Eviction took about 2 months.(not bad).  After 2-4 weeks of cleanup, the property was back on the rental market by late October/2014.

To be continued on the next post.

Cameron Norfleet · Answer

Fire him TODAY!!

But regardless who you use as a property manager, you should let them know upfront that you don't want for them to send you unqualified tenant prospects because many of their clients likely want to know about every prospect.

But based on his unresponsiveness and mismanagement of the other properties, he's gotta go.

Jay Hinrichs · Answer

@Joe Kim   PM regardless I bet you will always have problems with these units look at the only tenants willing to rent there they are bottom of the barrel.. One flat tire from default... Its the asset as well...

You can be the top dog PM but even they can't control life long renters who will never get better will probably live in 30 to 50 different homes or apartments in their lifetime.

I would sell all together and buy better quality were you can get tenants with real credit score's and real jobs...

Now if you live there and your going to create a business with this asset class thats different but you need to be buying 10 of these a year minimum with a goal to own hundreds of doors.

Your next  email will be your units have been hit and vandalized.. your lucky if one was vacant for 2 months and this has not already happened.

Alberto De jesus · Answer

If your not getting the service you want, i suggest leaving asap. This property manager has no idea to screen tenants. They also are not responsive your email and phone.

This property manager does not have your interests at heart.

If you decide to go with a new property manager, maybe you can use this experience to screen and train the next one.

Shawn Holsapple · Answer

@Joe Kim I would swing that ax today & start interviewing new PM's today as well!

As you said, the 2 unqualified applicants shouldn't have even been mentioned - total waist of everyone's time.

2 months for eviction seems very long.  I average less than 4-5 weeks.

@Jay Hinrichs hit on some good points as well.  I'm guessing this unit is in Center Township and probably rents for $550 or less per side and is about 100 years old?  These are tough to keep running [I had 22 doors like this at one point...it sucked]

For what it's worth, I've went through over 12 PM's in 3 years to finally find a couple that seem to have their act together and actually care of about my properties.

Feel free to PM me for contact info.

Greg Morical · Answer

Joe:

For the money you are paying the property manager, you deserve to receive good quality and responsive service.  It sounds like this property manager falls short on both counts.  I would encourage you to move on.

I have three SFR's in Indianapolis, and I have been pleased with my property manager, their systems (monthly reporting and ACH payments of rent), their responsiveness and the quality of the tenants they have found for me.  Let me know if you are interested in their contact info.

Greg

Julie Fullmer · Answer

How do you break an agreement with PM to fire them?

Joe Kim · Answer

Update:

I finally got my unit rented after 6 months of vacancy!   Starting Feb1, 2015, a new tenant finally signed a lease (tenant #2 signed the lease)

#1 I put the fire under my PM to get his act together.  Basically threatening to fire him. (But not exactly saying those words explicitly)

#2  The more important lesson is that it is very difficult to find a tenant in late fall/winter in the midwest when there are very few people looking for homes.   Therefore, the only way I got it rented is to drop the rental price by $100 from $1099 to $999.   But I did make a shorter 6 month lease at $999 and will raise back to normal $1099 in the summer at renewal time.

#3  Managing a manager takes a lot of work and putting on pressure when its needed can be effective.

Finding good people in any industry is not an easy task.  That's for sure.

Matt Anderson · Answer

Question 1: How is applicant #1 and #3 even mentionable?  why bother even putting them on this potential list?

Response 1: Depending on what your (management) agreement was would determine how much information a property manager (here after pm) should give you on an applicant. If you want to approve and look at all applicants then the pm should give them all to you and let you pick since that was your agreement. If you wanted to exclude ones that don't meet a certain criteria then the pm should honor that request. Bottom line property managers have a fiduciary duty to disclose to you unless you agreed otherwise. Pm's should error on the side of over disclosing. It might be wise to give the pm the rental criteria you want them to use and they simply pick off of that criteria (you would be more hands off). However if you are still trying to be "active" for tax purposes then that may not be a good decision either. At a minimum it probably makes sense to have a minimum standard if you are going to be reviewing them all. Where are the background checks on the three applicants? See bigger pockets tenant screening guide.

Tenant #1: From my experience I would not rent to someone who has 5 collections. You might be the 6th. Plus you are missing rental history which would be an incomplete application.

Tentant#2: Not an ideal tenant but since they just wiped out all (or most/assuming) their debt they are likely to have extra money now to pay rent. I think the higher security deposit is a good idea since it would offset some of the cost if you had to evict them (must act timely so you are not losing more money if that becomes a reality).

Tenant#3: Again not an ideal tenant however with some risk mitigating factors such as the larger deposit it could be consideration. However since she hasn't figured out how to save yet might not be worth the gamble. Possibly a co-singer but even then you would have to chase down your money.

Sometimes less than ideal tenants can be great tenants. Reason being they have a bankruptcy and they likely not going to be buying for seven years thus they need to rent. Sometimes A prospects may not be as good because they will likely stay for a shorter period of time.

Question 2: My question is this.   Even if he finds a new tenant for me in the next few weeks, is it worth staying with this guy or just cut my losses and start new with a new property manager?

Response 2: The others issues aside if the pm is not timely in his responses then it's time to cut the cord or at least tell him what your expectation is in terms of a response time and if he doesn't meet it then pull the plug. By the sounds of it if he is not responding to you I can almost guarantee that he is doing the same thing to others (prospects and tenants). Bottom line if you are not going to be priority to him then it is an easy decision and by the sounds of it he has history already.

Matt

Joe Kim · Answer

My question is this.   Even if he finds a new tenant for me in the next few weeks, is it worth staying with this guy or just cut my losses and start new with a new property manager?

how to fire your property manager?

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