Property Manager Expectations

[Blake Wardman]

I'd appreciate any input you guys have for me.

I bought an out-of-state SFH rental property in St. Louis back in October through a turnkey provider. They work with a local property manager that does their rehabs and manages the properties on an ongoing basis as well. It took about 45 days to get a renter in, but after that I thought it would be smooth sailing.

Since then, the property manager has failed to send my the renter's basic information after many requests. I've never seen their application, I don't have basic contact information, other than a couple screen shots of their background check I have no idea if there's actually a renter in there or who it is other than a name.

Additionally, it's taken the property manager well past the date that they're supposed to send me the collected rent each month. For example, they told me to expect rent on the 10th (assuming it's received on time) and I didn't receive it until the 17th last month (even though I was told it was paid on the 5th), and I still haven't received anything this month or even notification as to why it might be late (it's the 13th).

I'm also not receiving the monthly reports I was told I would receive while I was vetting them out.

Is this normal? Are my expectations to high? If not, how hard is it to switch?

Thanks everyone!

[Ricardo R.]

@Heidi Omans @Blake Wardman my advice on finding a good PM is to focus on services. Where I think most investors go wrong is that they focus on price first and then wonder why the company that is going to carry out those services doesn't perform as expected. For instance if your decision making factor is the monthly management fee between PM companies then you probably have already lost again. Now I'm not saying that just because a PM company has a high management fee it makes them better, but it doesn't make them worse either --- it's all about the services and quality of service. Just to break it down a bit lets just say your rental brings in $800/mo. ... most PM's will probably charge 10% so I'll use that --- that translates into about $80/mo. that you pay your PM to manage that unit. Now... if all you cared about was collecting the rent then it wouldn't be such a big issue.... but I can think of 40+ additional services that you will need or require and that a PM will provide for that fee - collecting the rent is ONE of those 40+ tasks but it is what the management fee is based on. 

The issue always comes down to many owners mistaking the phrase 'property management' for 'all inclusive' - to varying degrees. Don't know about you... but $80/mo. to manage a unit with the abundance of tasks that might be called on is not a money maker or the 'luring' incentive that many owners believe it is. So going back to the 10%...... 10% of what? for what services/quality? .... That is really the question you need to be asking and looking to answer when vetting PM's. Throughout the process keep in mind that your $80 a month is not and will never be 'all inclusive' specifically if your asking PM's to do anything that is outside of their tried and true management system. It is just not worth it for a PM to have an exception to their system just for your property and the next and the next... you're fee only works within the system. So for example, if your PM inspects their units bi-annually with relative success but you'd rather it inspected every month because you believe you know better... expect them to 1) either charge you more or 2) not fulfill your request.. and so it's always best to just continue looking for a PM that fits what you're looking for. 

To recap however, the vetting process would have to address each of those 40+ tasks while under management and even more while for lease --- so really, you can certainly turn away a PM when they do a task differently than you would like but eventually you're just going to run out of PM's to vet and at some point you have to realize that your property is ONE property within a system of management and instead focus on overall customer satisfaction and end results that a PM delivers. Hope this helps.