How reliable are managing agents?

[Carol Klein]

I am inheriting some high end real estate with two rental units. I don't want to sell as it keeps going up in value. I'm an older gal and can't deal with two tenants myself. In the process of evicting a tenant now. I was told they have managing agents to deal with tenants, but do they really make things almost stress free for a landlord? I'm not looking for someone to just collect rent, but to manage repairs, tenant issues and conflicts etc. I guess I will still have to evict a tenant though. Just wondering if the stress is worth future gains. The property is in south Brooklyn with ocean views. Dropped a bit but came back after Sandy. Was hoping to get some feedback from others who have used these property managing agents. Thanks.

[Nathan Gesner]

@Carol Klein you already know there are bad tenants. Does that mean you should never rent? Of course not! You learn how to screen tenants so you only get the good ones.

Property Managers are the same. You'll hear all the horror stories about how they steal money, allow tenants to manufacture drugs in your basement, never check on the property, etc. Yes, there are Property Managers like that. But there are a ton of good Property Managers that can handle more than 90% of your workload for a nominal fee AND do it better than you do. I manage 340 units for over 150 different owners. The majority of those owners make more money AFTER paying my fees than they were making on their own. And they don't have the headaches.

Here's a little guide a wrote about finding a good property manager. Feel free to reach out to me with questions.

You can start by going to www.narpm.org and search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start.

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!

4. Review their lease agreement and addendums. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.