Should I fire one of my owners?

Question

As PMs, 20% of our portfolios take up 80% of our time. A few clients or properties can suck up all of our time and attention and ultimately, prevent us from taking on more business. Our end goal is to be in a position where we can be very selective and choose the clients and properties we work with so that doesn't happen. We desire a certain level of autonomy and trust with our clients. It takes time but that's the desired outcome.

If you're a PM, how would you handle this owner? Would you fire them and give them a referral? Try to realign expectations?

If you're an owner and investor, how hands-on are you with your PM?

This client was transferred to me by another PM in our company because her portfolio is maxed out and she doesn't have capacity to take on more properties.

This client had been self-managing a short-term SFR for the past several years and recently converted it to LTR. Her and her husband are getting older so they hired us to manage.

Tenant moved in the first week of December and there's been an excess of communication from the owners for somewhat minor issues or concerns.

- Tenant submitted a work order for low water pressure in 2 bathrooms

- Tenant submitted a work order because the garage door doesn't close all the way and left a 2-3 inch gap at the bottom

- Owner initially refused to address either work order

- Owner demanding the tenants place furniture pads on each piece of furniture

- Owner calling multiple times to speak through the work orders, asking when they've been scheduled, calling a couple days later requesting the invoices

- Owner calling because they want to access their storage in the basement so they can remove several pieces of furniture being stored

- Owner now emailing requesting multiple property inspections throughout the lease cycle

- Owner questioning my experience and relative PM knowledge because I'm not following up with her in a timely manner (the following day after the work order)

Keep in mind, this is 2 weeks after the tenants had moved in and the tenants are very happy in the home.

This is something we see on a regular basis. However, I thought it would be interesting to get general feedback from the BP community. Am I being harsh by letting this owner go?

Scott Mac · Answer

The way I look at it if you are open for business and you have a business line, and there are owner questions or issues that needs to be dealt with you should take the call and handle the business of the call.

It might be that this couple that owns the house is just getting their feet wet with having someone else managing the property and they want to get comfortable with your management style as being what they want.

Making such a hasty decision on two weeks worth of knowing these people as your customers seems like a rash decision to me, but I don't know exactly what's going on, and sometimes personalities just do not mix well together.

If it were me I would give them two or three months and respectfully answer their questions but also let them know what your ground rules are regarding taking calls and how you handle things - in other words be polite and also educative as to how you handle things.

Good Luck!

Kristian Sexton · Answer

Hey Philip-

Gosh you're so right, 20% of owners taking 80% of our time. Something that my team and I did last year that really helped maximize our time was re-do our management agreement to set expectations. Does your management agreement speak to this in any way?

Our agreement speaks to almost all of these things. I'm afraid if you don't get a handle on it or let them go with a referral it could be detrimental to your business and could quite possibly lead to negative google reviews.

Drew Sygit · Answer

@Phillip Austin feel your pain!

Some owners expect their PMC to actually be a personal assistant:(

How did you set expectations for this client when onboarding them?
- If all their experience is STR, then they are probably expecting you to treat them like an STR guest. Which means, "immediate gratification".

The only way to save this client and your sanity, is by resetting their expectations NOW or parting company.

FYI: really do feel your pain! Had a newbie client that bought 5 SFR rentals and called us 3-5 times daily. The team and then myself, all tried to set their expectations, but to no avail. We parted ways, they went to another PMC. Apparantly that didn't work out for them either as they sold all their properties a couple of months later. Some people just are NOT cut out to be landlords.

Adam Bartomeo · Answer

It sounds like the proper expectations weren't set when you took them on. I always cover my experience, the brokerages experience, and expectations with communication - 9 - 5, M-F, 24 hr turnaround during business hours, and the owner can reach out to me personally when the team isn't present.

We have fired owners in the past but never due to over communication. We fire them for lack of communication and lack of aligning with our core values.

J. Mitchell Bernier · Answer

This does seem like a lot of communication, but I would have a conversation with the owner about this prior to firing. I would explain to them your process of handling requests, response times, property inspections, and so on. If they are wanting an even more hands-on approach, then i would refer them out. I wouldn't try and price it up to keep the business. I would just stick to your systems and processes and if the fits not there so be it. However; I would explain it to them first before just letting them go.

Jake Knight · Answer

We've had several situations where a potential client would tell us what we want to hear. After signing up and when it comes to managing the property they do the opposite.  Business is valuable and this has not been a great year for the property management industry. If you don't feel it's worth the trouble then you may choose to move on from it.  That being said, what if you met with the client to try and reestablish boundaries and see how that works first? Did you set the right expectations up front before they signed up?

V.G Jason · Answer

This is all an area of pricing.

You'll keep the owner for a certain price, right?

If so, offer that price and if they doesn't like it let them be someone else's problem. You don't fire people, you just make it worth your while.

Phillip Austin · Answer

Thank you all for the thoughtful responses!

Each of you are correct in thinking expectations were not properly aligned during the onboarding process. Another broker on the team onboarded this client and transferred them to my portfolio due to capacity issues.

I have since realigned expectations with this client and addressed all of their concerns. All is well for now! But I don't foresee them being a long-term client.

Setting expectations is paramount. This owner has been self-managing for several years and thinks we should abide by their personal philosophy and processes when it comes to managing their property.

As PMs, we're always open to feedback but we have, or should have, a proven process on how to manage properties. When clients come onboard, that process should be explained in great detail and by signing the PMA, you are agreeing with our standard processes and core values.

Far too often that process is never fully explained and/or proper expectations are not set, hence new clients try to tell you how to run your business.

Should I fire one of my owners?

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