What you are looking for in a property management company

[Ross Sumner]

I am beginning the process of starting a property management company in Richmond, VA. I have rented from a handful of property management companies during my time in Richmond and I had a poor experience with all of them. Maybe I am a bit biased, but I think I was as easy-going of a tenant as anyone could ask for and I could not have had worse experiences with property management companies.

I want to do this because this will be a great start for me to get my buy and hold properties and learn how to manage them efficiently. My question is, what are property owners looking for in a property management company? I have a lot of ideas of how to make the tenant experience, which is important to keep good tenants, but I want to get a good feel on how property owners expect their property management companies to manage their investments.

Thanks in advance!

[Edward B.]

I almost responded to this when you first posted but it was just too big for me to tackle at the time.

I think you are going to find that owners are just as varied and crazy as tenants. @Chris Malo only wants to be called by exception, others will want to be called about everything, I am probably somewhere in between. Unless you can tailor your business to suit the needs and desires of each owner and each tenant, you will find that you get a lot of bad reviews yourself just by virtue of being in the property management business.

In order to make money you are going to have to systematize and standardize things and that will not work for all people. Perhaps if you only take on clients that suit your business model. Vet your owners just as much as you vet your tenants. One of my best PMs did that to me. I had to sell him that I was a good owner and we have had a spectacular relationship. He is not the cheapest in terms of fees but overall he costs me significantly less money because he puts good tenants in my properties and takes care of maintenance problems quickly and up front before they become a huge issue or affect his ability to rent the property. If I don't maintain the properties, he won't manage them. Personally I like that, but I am sure others don't like being told how to maintain their properties.

A very limited list of things that I like to see only because I have had issues with them in the past.

1) Never forget that ultimately you work for me, not the tenant. I am the one who pays you. Part of your job is maintaining good relationships with the tenants but if push comes to shove, don't bite the hand that feeds you. A lot of PMs deal with tenants all the time and owners rarely and have a tendency to default to the tenant's side on any issues. Especially with rent, fees, maintenance, and repairs. Again, if you have an unreasonable owner you shouldn't be managing their property.

2) Communication. Keep me informed and I will stay out of your business. Keep me in the dark and I will be all up in your business. This can be a fine line. I don't need to know everything, but I do like to know anything that could be a big deal or become a big deal. What is that? I can't necessarily tell you but I know it when I see it. And I hate, HATE, surprises. Bad news only gets worse over time.

3) Make recommendations. You are supposed to be the expert and you are the one at ground zero. You should have all of the information to make a good decision. So give me all the information I need to make a decision (can it wait?, what will it impact?, how much will it cost?, etc, etc) and tell me what you recommend. It really irks me when the PM says something like "the tenant wants to extend for 3 months, what do you want to do?". Well I don't know, are you going to be able to rent it just as easily in 3 months? Are they willing to pay a short lease fee? Is it rented below market right now? Have they been good tenants? Throw me a bone here, I need the info. I also dislike getting a laundry list of items that need repair with no quotes. So you expect me to just write a blank check? Is any of it the tenants responsibility? What needs to be done now to protect the property and ensure low vacancy with good tenants and what can I budget for?

I honestly could go on and on but those are three big ones that pop into my mind. Good luck and let us know how it goes. There is a really good post on here about the crazy things tenants say and do. There should probably be one about owners as well.

Ed