Important Questions for Property Managers and Seasoned Investors!

[Alberto Nikodimov]

After 15 years of experience in property management in Orlando and Central Florida our team has settled on the following conclusion:

There are two types of investors and two types of property management companies, and they attract one another.

The goal of this post is to hear the opinion of BP investors who are using property management companies. Specifically, seasoned and successful investors with multiple properties handled by a PM company.

Which of the two types of investors are you?

What type of property company are you partnering with?

Do you believe the above is correct based on your experience?

Part of my role is helping new investors/owners understand our product and decide if we are a good fit for their property management needs. Over the years I realized that no matter what the investors needs are or how many properties they own, at the end of the day there are only two types of property owners/investors. Correspondingly, there are two types of property management companies.

1st Type Property Management Company:

• · Poor customer service on both owner’s and tenant’s side.
• · Lack of communication (Getting them on the phone feels like winning the lottery).
• · Dishonest.
• · Lower Fees on the front end when signing up for services. Owners later discover a multiple hidden fees they were not expecting.
• · Overcharging for repairs and pocketing the difference (Markups).
• · Cheap software if any. Often understaffed to maximize profit.
• · Horrific experience on the tenant’s side.
• · Part timers or side hustle instead of a professionally operated business.
• · Neglect maintenance which leads to bigger and more expensive repairs down the road. Therefore, damaging the investment by not performing regular maintenance.
• · Trying to find things to do/charge for when there is no need in order to create additional income.
  
• · Long term agreements – trying to make as much money possible of the home while have it locked under contract
• · Subcontracting!! Does this surprise you? Yes, this is not something uncommon. There are "Property managers" who sign up owners for their services and then subcontract a cheaper company and keep the difference.
  
  

2nd type of Property Management company:

• · Honest, Transparent & Trustworthy.
• · Clear fees disclosed upfront. No hidden fees, up-charging or unpleasant surprises.
• · Looking for long term relationships with owners and helping them grow their portfolio.
• · Great softwares, accounting and bookkeeping which better the experience for all sides.
• · Always having owner’s best interest in mind.
• · Provide premium service which usually comes at a higher price.
• · Great reviews on all platforms, mostly from property owners.
• · Great reputation & highly recommended by realtors and other local professionals.
• · Always answer the phone in good and bad times.
• · Regular inspections and maintenance which save investors money and prolong the life of AC, appliances, water heaters etc.
• · Using great vendors who only go out once, complete the job and guarantee that if anything goes wrong, they will be back to fix it.
  · Better rates from vendors because they have large volume of work for them and get special treatment.
• · Quick turns when property becomes vacant, quality work at reasonable rates.
• · Saving money for their investors.
• · Providing great experience for tenants and realizing that a happy tenant is the key for a successful investment.
• · Help plan repairs and keep you updated on upcoming repairs in the near future.
• · Willing to admit they made a mistake and correct it.
• · MOST IMPORTANTLY - Manage the investment not just the property – maintain the asset in optimal condition, constantly increase cashflow, limit liability and avoid issues with the investment.
  
  1st Type of Owners/Investors:
  
  
• · Appreciate the work done by their property management team.
• · Pleasant to work with.
• · Treat the relationship as a partnership.
• · Extremely diligent in their initial search for property management companies. Often ask a lot of questions in the beginning until they understand the values and processes of the company. Once they feel comfortable they let go and trusting their team to do their job.
• · Conservative with their numbers. Account for PM charges, repairs, and vacancy.
• · Happy to pay premium for premium service.
• · Not micromanaging.
• · Have reserves and plan for big ticket future repairs.
• · Base their choice of Property Management Company the experience & expertise and services rather than price.
  
  2nd Type of Owners/Investors:
  
  
• · ALWAYS GOING FOR THE CHEAPEST PROPERTY MANAGEMENT COMPANY.
• · They think they know it all.
• · Always want to do work on the property themselves even if they have no experience. Most of the time this ends up taking much longer than anticipated and costs them more in time, effort and vacancy than hiring a contractor.
• · Micromanaging.
• · Having troubles trusting their property manager. Most of the time with a good reason because they initially selected a bad property manager.
• · Never keeping enough reserves.
• · Always trying to get the cheapest contractor they can find who 95% of the time ends up doing a terrible job.
• · Not willing to take advice from his/hers property manager.
• · Never appreciative of the efforts of the Property Management Company.
• · Pointing fingers instead of taking responsibilities.
• · Negative, expecting bad things to happen to their investment properties and they usually do due to the poor management they have selected.
• · You will often see them jumping from one property management company to another while complaining about the entire industry. At the same time, not willing to pay premium for premium service and always end up going with another cheap and unreliable property management company.
  
  

The second type of investors are sometimes new investors who have not learned their lesson. Other times, they have had several bad experiences with property management companies due to prioritizing low prices and lack of research. In property management you get what you pay for.

A good analogy - If you have a health issue are you going with the cheapest doctor available or are you trying to find the best & most experienced specialist in town?

Good investors know how important it is to find a reliable and honest property management company which is competent enough to handle their property and ensure a profitable investment. At the end of the day a good property manager can make or break your investment.

Which of the two types of investors are you?

What type of property company are you partnering with?

Do you believe the above is correct based on your experience?