Big Management companies or small management companies?

Question

Do you prefer to work with large or small property management companies? Why?

David K. · Answer

Big management company's are fine for some investors. There's plenty of them out there both National and just big in a market. Some are excellent, many are not. In Atlanta many of the larger groups are some of the most knowledgeable and active in our local NARPM.I'm a PM for a smaller company. My tenant's deal with me, or maybe one other person. If you want facetime, the smaller spot for sure.I had a whole story time thing written that sort of got away from me. Find the PM who's fully invested in you and your success. Where you feel comfortable, and the communication flows well. Keep your eye out for fees, and don't go cheap. You do all that, either will be fine.

Nam Trang · Answer

Not sure I agree with the big vs small argument.  The way I see it, both have access to the same technology and with more advanced technology being released it can help optimize any business.  Regardless of size.

I've had the luxury of talking to a lot of different management firms.  It's interesting to hear their takes.

Why are you small?

Capped Limit:  They don't want to manage that many properties as the broker, so they place a cap limit of X units.

Sales:  They still do regular sales but don't want to detract from this service

Quality:  They feel under their limit allows them to maintain quality.  Perhaps even charge more.

Capped Area:  Especially in a large metro like Cleveland, they don't want to travel all across town all day address issues.  I know PM's who only manage in Medina, others who'll manage within a 30 min drive of their office in Akron.

Growing the biz:  They recently started their business but are still growing their assets under management.

Why are you big?

Franchise:  They have the operational support of a franchise behind them.  Although they need volume due to the sunk royalty cost.

PM Only:  Their business is only management oriented, therefore they can apply all of their efforts into the same tasks and systems.  Which allows them to take on more clients.

The question shouldn't be if a small or big firm is the right choice.  Here's what I would focus on:

What technology / systems do you utilize?

What is your units to property manager ratio?

What is your average tenant / unit turnover duration?

What limitations are placed on the landlord: can I use my own lease, tenant screening, maintenance, etc.  **If this is important to you

Is maintenance an internal or external team?

Who is my main point of contact?  What is their preferred contact method?

At the end of the day every landlord has their own preferences.  Big or small doesn't matter, value does.  However you perceive value will indicate which direction you will want to proceed.

Bob Stevens · Answer

@James Gleeson as long as they are doing their job, I do not care if they have 5k doors or 100,,,,,

Julie Hartman · Answer

I am not an investor but am here to fly the flag for the small PM companies. I work for a very small outfit and we pride ourselves on our personal level of service. If you pull out any of my property files and tell me the address, I can tell you the names of the tenants, their kids, and pets - without looking. Can a big PM company say that? I doubt it. When my phone buzzes at 1:00am, its on my night table and I respond to it. When one of our tenants has a baby, we send a gift. We can do those things because we are small and can give a level of attention that larger companies may not. Sometimes we get overlooked because we are not part of NARPM - its very costly for a small company like ours. We still do our continuing education and stay up to date on laws, etc.

Drew Sygit · Answer

It's not big or small, it the value you get for the price.

Nathan Gesner · Answer

People are giving some valid reasons for why you should stay small, but I can give equally valid reasons why a large company can do better:

I still answer the phone at 2am. With 400 units under management, I often don't know much about the Tenant and sometimes take a couple minutes to recall the specific address. However, all that information is stored in a database and can be recalled in 1-2 minutes from my computer or any mobile device. I don't send gifts to my tenants because I'm hired to manage the property, not make friends.

Some benefits of hiring a large company? I can usually respond to maintenance quicker because I have a larger pool of vendors. I can turn units around quicker and rent them faster, often for a higher price. I offer benefits that attract more renters. I offer protections to my owners that a small company couldn't afford ($5,000 towards pet damage, free evictions and I cover up to a month of lost rent, $10,000 for bed bug treatment, professional inspection reports published for owner review, non-traditional deposits that make it easier for tenants to move in while offering the same protections for the owner, and much more). I have established, written policies that ensure we are prepared for almost anything and all my employees can answer owner questions/concerns without hesitation.

There are companies that get too big and lose the personal touch but there are also companies that are too small without experience, established policies and procedures, fewer protections/features, etc. Do your homework, compare managers of all sizes, and choose what works best for you.

NARPM membership is around $300 a year. Just by networking with more experienced property managers, you can learn how to increase your annual earnings and get back far more than the membership fee.

Jimmy Chao · Answer

I don't know that size has anything to do with making a decision. At least, that's not what I've found.

One thing I do avoid is the franchised management companies. They will absolutely eat you up with their unnecessary fees. That's how they're able to pay their franchise fees. I'm not mentioning any names....

But local small or large doesn't matter to me. Service and communication make all the difference. I'll certainly pay more for a great company.

Big Management companies or small management companies?

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