Changing property managers, will that confuse the tenants?

Question

Hi BP, When we change property managers, do tenants have to sign up for a different property management software for payments with the new manager? Or we use the same software only different manager? I don't want to annoy the tenants with change in rent payment methods every time I have to change property managers.

Sorry, newbie here :)

Mike Dymski · Answer

Changing PMs is no picnic but it's just part of the business.  Unfortunately, I had to change PMs three times in a little over a year until I found a decent manager.  I don't have a big portfolio at 34 units but I imagine it was a hassle for the residents and likely looked like the owner (me) didn't know what he was doing.

All three management companies used the same software; so, that helped.  They send welcome packages to the residents explaining the new processes.

It was also a huge hassle for me and uncomfortable not knowing if that amount of security deposits and monthly rent would be handled properly during the transition from the exiting management company.

You will also want to understand your management agreement prior to signing it as it will contain exit provisions.

3rd party management will make or break you.

Ray Lai · Answer

@Andri Artayudianto

Very easy to. They can place bad tenants and keep charging you for placements. They can not actually take care of your property since you don't have eyes on it and let it get trashed. They can overcharge you for repairs and there's nothing you can really do about it once they're your PM because they have all the leverage on you when you're not physically there to see. They can take weeks to respond to your voicemail or email, and nothing you can do about it. Your PM can make or break you.

Ray Lai · Answer

@Andri Artayudianto

PMs usually have a per property minimum, for a duplex you're looking at the per property minimum usually or the X% cost, whatever is higher. I would never pay $100 fee per side on a duplex that rents for that little. PM fees usually range from 6-10% with other hidden fees not included like tenant placement and other administration fees.Because you work so much and are investing OOS, you probably have to get a PM which is very unfortunate since it's hard to find a good one and they can rob you blind easily when you're OOS.

Kim Meredith Hampton · Answer

@Andri Artayudianto even though the PM may have the same software, they still will receive a new link to set up theit portal. I just bought another management company recently, and we both had the same software, but had to reset up everything, sounds crazy, but that's what they do.

As long as everything is communicated properly, they should be able to make the transition

Ray Lai · Answer

@Andri Artayudianto

Before switching your PMs, you can ask the new PM what software they use. If they use the same software, it should be pretty simple. If they use no software, be careful. What softwares are your old v. new PM using?

Tracy Streich · Answer

They will need to use what ever payment method your new PM uses.  Many times it is specific to the software used by the PM

Andri Artayudianto · Answer

@Ray Lai That is a discouraging thing to hear, especially for a newbie like me. But don't I have to approve the tenants before the PM lets them in?

In one state, I have an agent who can place & screen tenants with my approval for a fee, then I manage it from that point on. Maybe that's a good way to start.

Andri Artayudianto · Answer

@Kim Meredith Hampton thanks for the reply :)

Andri Artayudianto · Answer

@Ray Lai What do you mean by "they can rob me?"

Changing property managers, will that confuse the tenants?

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