Use my real estate agent as my property manager?

Question

I am closing on my first duplex tomorrow, located in Bedford, Ohio. I am having trouble finding a well-recommended property management company that services this area. My real estate agent has offered to manage the property for me. She actually lives near the property. She manages properties for two of my friends as well, but this is not her go-to business and she is not set up online for this service. My friends do not have any complaints with her but she sends the rents through a payment app and it seems a bit unofficial. I am not sure if this matters. Is it a good idea to use my agent as my property manager?

Any leads for property management that serve Bedford are still welcomed. Thank you!

Any leads for property management that serve Bedford are still welcomed. Thank you!

Jad Boudiab · Answer

Having been a solo-agent manager in the past, here are my thoughts.

Solo-agent - no systems or SOPs, open to many mistakes, PM is a often lesser priority than selling a client's home. Even if the agent wants to focus on the PM functions and grow the portfolio, once they're around 50-75 units, they'll start to become overwhelmed with the workload as a solo-agent and won't perform as well as a solid team / company. Pros - easy to contact, usually available at all times for a call, can give very detailed feedback on just about everything because they're the only person work. Cons - lesser quality control, more prone to mistakes, fewer efficiency, inability to scale. If they get injured or sick, who's to cover? Better yet, when they have to attend eviction court, eviction day, are your showings going to be pushed back? There's too much going on in the PM operation for 1 person to handle, especially when they also actively sell real estate as an agent.

I now run an operation of 10+ full-timers in the Cleveland area and can tell you the results now are much better, the operation is running even when multiple people are away, owner inquiries are responded to same-day, emergencies are handled effectively, records are kept on everything, yada yada. No way to do this effectively as a solo, 1-person operation.

Jessica Beard · Answer

Thank you all for your comments and messages. For now I will use my agent to place tenants until I find a PM company to work with, then I will transfer everything over to the company.

Gwen Fyfe · Answer

Thanks for the shout out Jeff! I moved out of the 4 unit a couple months ago and it's cash-flowing beautifully. Tons of demand for those small units in Bedford.

Jeff Brower · Answer

I agree with the answers above. I think in the long run you will be better served hiring a company as you know they will be reliable. I would also recommend @Gwen Fyfe if you have any bedford specific questions. She lived and rented a multi right in the heart of bedford and therefore knows the local details probably more than anyone else. (Hi Gwen! I see you moved out of the 4 unit, hope all is well with that place! I just moved out of my duplex in willoughby as well. Fulfilled my 1 year fha requirement and on to the next!)

Brian Garlington · Answer

Go to Zillow..........see who the agents are that have LISTINGS of DUPLEXES and TRIPLEXES in the exact zip code that your property is in..........then call them and ask who they use as PMs in that neighborhood

Nathan Gesner · Answer

There are a lot of real estate agents that dabble with property management. This may seem to work...until it doesn't. What's her process for screening applicants? How will she handle late/unpaid rent, lease violations, unauthorized pets, etc? Does she have a network of reliable vendors to coordinate maintenance? Does  she understand the rental market to ensure you're getting market rate rent? How familiar is she with the law to ensure you're not in violation and subject to a lawsuit?

It's nice of her to offer but all she's really offering is to charge $100 a month to collect your rent. I could provide you a lot more professional service for the same price from my office in Wyoming. No, I'm not actually offering. :)

Remember: cheaper doesn't mean you'll make more money.You can start by going to www.narpm.org to 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. Regardless of how you find them, try to interview at least three managers1. 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 addenda. 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, late rent, evictions, turnover, etc. 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.7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!

Gwen Fyfe · Answer

Hi Jessica, I lived and invested in Bedford (just moved in to Cleveland) and did that for some out of state investors too. It can work out great, but yes, it's not very official and you really need to trust the person. I wouldn't see the cash app thing as a red flag, though - it makes sense in the situation. Are your friends happy with her?

I'd be interested to know who we're talking about! Wouldn't mind grabbing coffee with a neigbor who's also doing this.

If you decide you're not that comfortable with it, I can recommend IIP Management. I use them on properties in Bedford. We had some hiccups getting set up but I'm happy with them now.

Peter Tverdov · Answer

It's usually best to hire a professional. Realtors are not PMs. They might wear that hat but they won't do as good of a job as we do.

Steve Maginnis · Answer

Hello @Jessica Beard.  There are a lot of variables which should go in to making your decision.  She may be fine to use and you may have no issues at all.  Especially if you are fortunate enough to place a good tenant.  The problems typically arise when there are issues.  We don't know how much experience she has in dealing with problem tenants, evictions, repairs/maintenance, etc.  If you feel comfortable working with her and already have a decent relationship, that goes a long way.  I would not advise locking in to a long term contract, so you keep the option of finding a well-seasoned manager in the future.  Especially if things go wrong.  My being a worry wart, would be constantly concerned if she inadvertently drops the ball because she was not aware of a particular law or statute, and I would pay the price as owner.  The risk may not be worth the reward.  Best of luck.

Dennis M. · Answer

Most realtors can barely sell a house much less manage a property and tenants ! Pay people who actually do this for a living

Use my real estate agent as my property manager?

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