Am I expecting too much from my property manager?

Question

Hello everyone, this is my first time posting in Bigger Pockets. I used to be a State Trooper in WA State and my husband was recently medically discharged from the US Navy. I am originally from WA and we purchased a Triplex as an investment rental property in WA. We started out house hacking, then eventually we decided it was time to move to Alabama to be closer to family.

I was self managing our rentals prior to moving out of state. Once we decided to move, we thought it would be easier to hire a property manager due to being across the country and unable to personally show units, do inspections, etc. We have been using our new property manager for about three months now.

Since this is our first time working with a property management company, I am unsure if my expectations are too high, or if our property manager is under-performing. I would love some advice and feedback.

One of our main issues is the lack of handling the property's expenses with the rent received. We are still personally paying water/sewer, trash, and electricity between turnovers. These utilities are currently included in the rent, therefore are not directly paid by the tenants. Our most recent problem is with the landscaping expense. We were originally informed that the property manager would deduct the expense from the rents received and pay the landscaper directly. Now, since the landscaper cannot accept PayPal (he can accept cash, check, venmo, debit or credit), our property manager asked us to take over paying the landscaper directly as well. The problem is that the property manager stated they are only set up to pay expenses using PayPal and no other means of payment. They stated they cannot pay any of the utilities with the profits due to the need for them to be in the owner's name. I do not see any reason why I could not add the property manager as an authorized user on the utility accounts though to allow him to make payments only, but maybe this comes back to the PayPal issue.

Is it too much to expect a property manager to pay utilities with the rental profit? Now that he is having an issue paying the landscaper as well, it feels as if I am handling all of the monthly management myself and they are only collecting rental payments.

I am strongly considering taking management back over myself and finding a solution for remote showings and inspections at this point because I do not feel I am receiving the value from a property manager that I thought I may receive. I would love feedback though regarding if my expectations are just too high, and also how to manage remote inspections/showings if I were to self manage from across the country. It is difficult to relinquish control of management, especially when I do not feel it is being managed to the same standard.

Thank you so much in advance for any feedback.

Scott M. · Answer

In my opinion, no, you are not expecting too much from "a" manager but clearly yes, it is too much for "your" manager.  A recent client of ours interviewed ~15 different property managers before partnering with our company and I asked them some questions.  Of the 15 they talked too 3 would not pay utilities at all or be involved in the transfer when a unit was vacant.  The balance would pay utilities but most had an extra charge if utilities were going to be put in their name during transfers.  During a lease term only a handful charged an extra fee to pay.

The paypal thing is kind of mindboggling.  As a property manager we accept and make payments through a large number of avenues.  Management requires flexibility at times and payments types is, in my opinion, one of those instances. Need to make it easy on tenants to pay and simple, quick and efficient on the vendor side.

Bottom line, your expectations are not to high in general but maybe to high for your current manager.

Account Closed · Answer

I agree with Scott you are not asking too much.  They will never be able to set up most utility vendors with paypal so this is a big problem, they have to have a work around.  I am curious if this is a new process for them or are they a new company?  Perhaps they do not realize that utility companies will never go through the steps to do this and most vendors will not either.  I would push back and insist they handle this.  In my opinion this shows a lack of understanding for client needs and how to leverage technology properly to operate their business.

Drew Sygit · Answer

How did you find this PMC?

Gonna guess that they are a very small operator, given they are paying bills with PayPal!

We do require all bills to be in owner's name, so we don't get stuck with balances. But, we do get the bills for owners and pay them from rents - this is pretty much STANDARD for the PM industry.

We agree with @Scott M. that this PMC is not suited to your needs.

Patrick Page · Answer

As a property manager we can pay utility invoices, landscaping invoices, service repairs, HOA fees, etc on behalf of our clients. Our preferred method of payment is via check as we have a way to track the payment. You want to be working with a property manager that has multiple ways to pay for services (Checks & Credit Cards). We maintain a maintenance fund to pay small invoices in between rent payments. When the property is vacant in between tenant residences we will set up the utilities and have them billed to us to pay on behalf of the landlord. A property manager's job is to take a lot of the day-to-day managing off of your hands.

Dick Rosen · Answer

You need a new Property Manager!

Nathan Gesner · Answer

You need a new property manager. A quality manager identifies the problems and creates solutions so you're free to focus on other things. This manager encounters a problem and dishes it off to you, which is an amateurish move.

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!

Amber Hardy · Answer

Thank you all so much for your feedback. We decided to start with him because he was also a personal friend, who also happens to be the real estate agent who sold us our home. However we realize now after reviewing all the responses and understanding what services other property managers are capable of providing that he was not the right fit for us. He did a wonderful job placing tenants but everything else was not up to my personal standards. Thank you all again, it is definitely much appreciated!!

Aigo Pyles · Answer

The property manager should deal with the problem. Better find a new property manager.

Timmi Ryerson · Answer

I did the same thing many years ago. I bought rentals when I sold a business that I had run for about 12 years. Then I moved out of state.  This was back in the day before there was software either boxed or cloud. So when I got the units paid off I decided to hire a property manager to manage so I did not have to travel back and forth to collect rent a state away.  The PM was a crook and used my account to buy bulk items for his own rentals. (My father is an accountant and we did an audit if the books)  I fired him and went back to managing myself.  Now I have a software company that does everything for me.  You can use it too or one like it.. The rent collection and most other jobs are automate.  If you have 3 units, it is under $30 per month for the subscription including rent collection.  That is what I would do. Your tenants will love using software as it is easy and takes no time at all.  If you want more information, contact me.  I will show you what it can do for you.

Am I expecting too much from my property manager?

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