Property Owner / Property Manager Conflict

[Mark Kelley]

I manage my own properties and have no experience using a property manager, but it seems from all I read on BP that there is often conflict between property owners and property managers. It seems a lot of the ire comes from owners who feel PMs are not doing a good enough, cheap enough, fast enough job. 

Why is there so much friction? Are there certain types of property manager and owner arrangements that work best to reduce potential for conflicts and align goals?

[Jeremy Brown]

There's often a conflict of interest between PM and owner.

The way the PM makes money is through a combination of more fees and less work managing repairs and other issues with the property.

The owner doesn't care how much time the PM spends managing. For example, they're more likely to want to shop around to get the best deals on a repair, while the PM wants to send the job to their regular guy and close out the issue ASAP.

You can also have conflicts in tenant selection. An owner might prefer a tenant who will stay forever. A PM who gets paid a large, fixed amount to place a tenant has a financial motive to pick tenants who are more likely to move. And, the PM almost always has a financial motive to fill a property quickly and may be more tolerant of someone who won't take good care of the property, since they don't own it.

Now, all this doesn't mean PMs are selfish, cutthroat people out to screw owners. Rather, owner and PM interests don't align in a lot of ways by the nature of how the compensation is usually structured. It's up to individuals to be reasonable, accommodating, and understanding. But, in this situation, even people trying to be reasonable will have disagreements. If you work with someone who IS selfish and unreasonable, then that'll be a disaster.