Property Management Woes

[Chereny Woodard]

I'm fairly new to real estate investment and I have one rental property thus far. I've had some property management nightmares. I recently found a new property manager who seemed to be a lot better than my previous one (which isn't saying much). However there are still some things that I am concerned about. I wanted to pose these questions to some more seasoned investors to see whether I just expect too much when it comes to property management services. The first red flag I had was when the property was still vacant and was being shown to several prospective tenants but no one would take it. As far as I knew, the property was in very good condition because I have previously done all the renovation myself before moving out of state. I hired this property manager when I moved back in state, but I still hadn't inspected the property myself. So after a couple of months of no one wanting to take the property I went by to take a look. The previous tenant had done some damage to the floor and walls and the back yard was a forest! When I saw the condition of the place I immediately thought to myself, "no wonder no one is renting the place, I wouldn't either." I had been paying the previous property manager for lawn services but had not received a bill from the current one and I realized why. No one had been mowing the lawn! Granted these are things I should have just inspected myself and I learned this the hard way, but isn't it a property manager’s job to tell the owner what needs to be done for the property to have the best chance of being occupied? What kind of property manager would actually show a place to prospective tenants with the back yard over grown by 5 feet and holes in the walls?! So red flag number 2 is that any time there is a tenant complaint, he automatically calls me to see if I want him to call a contractor. He does this without asking the tenant any helpful questions to see whether a contractor is actually needed. A prime example of this was when the filter for the refrigerator water dispenser cracked and leaked onto the floor causing some damage to the vinyl floor. I got a call from the property manager saying the fridge was leaking and did I want him to call out a plumber? I asked was it the actual fridge that was leaking or the line to the fridge. He did not know he said. Then how do you know that a plumber is needed and not an appliance person I said? He said the tenant shut off the line to the fridge and the leak stopped. I replied that still doesn’t tell us whether it’s the plumbing to the fridge or the actually fridge itself. I asked him was the fridge still working. He did not know because he did not ask. So I had to go over to the property myself (since I was back in town), see that the fridge was working although the water dispenser on the fridge was leaking so there was no emergency and no plumber was needed. So in this case I would have had to pay a service call to a plumber who would just tell me an appliance person was needed (for a non-emergency purpose since the fridge still worked) , which the property management company does not have anyway. The third red flag was when I had him have a contractor give me a quote for putting peel and stick vinyl on the floor. I received a $1500 for 365 sq ft peel and stick vinyl installation. I don’t know if he receives any kickbacks but that quote was ridiculous. So I purchased the vinyl for $350 and installed it myself. Yet another red flag was when I had some work done via a contractor my insurance company provided. I constantly had to monitor the progress because the property manager would not communicate with the contractor for status updates. He simply kept calling me every time the tenant asked when the repairs would be finished, instead contacted the contractor whom I had given him the direct number to. Furthermore, once the work was done I asked the property manager when I would be receiving photos of the finished work. He responded by saying that if I use contractors within his network they take before and after photos but since I used a contractor provided by my insurance company that no photos are provided. He said that he could call the contractor to see if he took pictures but he would not be going by the property to take any photos. He had previously had a plumber in his network fix a pipe leaking onto ceiling and I didn’t receive any before and after photos when that work was done, so I felt like he was just skirting his responsibilities. So I asked him what necessitates which projects have before and after photos taken and which don’t and he never responded. So I feel that he just doesn’t do anything that requires him to actually go by the property aside from a beginning of lease and end of lease inspection. The biggest red flag of all was when the tenant paid late one month so there was supposed to be an extra $120 owed to me during the month of January. When I received the invoice on the day he mails out my payment the $120 was not included. I asked the manager about it and he sent me an updated invoice with a ledger line stating “owed to owner next month” or something like that and there was the $120. This seemed fishy to me but I don’t know whether it’s standard to forward the late fees to the next month or not. So I waited to see what he would do the following month. When February rolled around I received a regular invoice and the $120 was mysteriously missing yet again. I contacted him about it and he changed the invoice and sent me the correct payment but I somehow feel like he was hoping he could keep it and I wouldn’t remember. I could go on and on but these are just a few things to try to give you a clear picture. I want to know whether I am expecting too much. Is it customary for late fees to be forwarded to the next month? My ultimate goal is to remove myself from the process as much as possible but I can’t do this if the property manager won’t do anything that requires him to have to go by the property. The only reason you need a manager is so you don’t have to PHYSICALLY be involved. I can call a contractor from thousands of miles away and accept the first and highest bid myself. Is it too much to expect a manager to go ask the right questions or to the property and actually see what’s going on? Or to have a manager that calls multiple contractors to get the best bid. Are these things too much to expect from property management and if so how do you ever get to the point where you’re not managing the manager or being way more involved than you should be for the fee you pay?