Property Management - Both Sides of the Double Edged Sword

Why is it so hard to find a satisfying relationship with a property management company?  Especially when it is THE most critical relationship in maximizing the annual return on your investment property. 

I remember when I entered this business about 17 years ago--it was so easy to take business from other management companies. At the time I was primarily interested in growing my company by adding doors to my management portfolio, so I didn't even pause to understand exactly why.  Now having an established business, my focus shifts more toward the axioms of the Pareto Principle and efficient scaling. At the beginning I was naive with loose boundaries but today with all the increased risks and liabilities, I can't afford to be as one major misstep can significantly set a PM back or even take you out.

By way of background, I'm a real estate attorney, broker, investor and owner of a mid sized property management company I built from the ground up (literally from a single house entrusted from a friend). In California, PM's have to be concerned with much more than "Tenants, Toilets and Trash". We live in one of the most regulated and litigious states in the country. It is a daily challenge to navigate the local, county, state and federal governments; Local Code Enforcement, Housing Authorities, Department of Real Estate, Franchise Tax Board, Secretary of State, IRS, Dept. of Fair Housing & Employment, HUD...to name a few. I'm certainly not making excuses or throwing a mini pity party, as this is the common plight of all small businesses. I'm simply attempting to round out the discussion and raise awareness for property owners when selecting a good management company who knows how to both sustain themselves for the long term, as well as protect your short and long term investment interests.

What has your experience been?

My blogging objective here is to create a series of posts that offer perspective for both property management companies as well as investors who struggle to meet their individual and collective business objectives. I'm looking forward to hearing and learning from other BP members as well all along the way. Future posts will likely include topics such as:

1. How to select and what to look for in a property management company.

2. DIY Property Management - Useful Tech, Apps and Services 

3. Property Management Software

4. Buyers- Don't Be Fooled By Understated Expenses on Listings 

5. Common Compliance Issues

6. Section 8 - Should I Accept? Do I have to? How to thrive?

7. IDEAL - Interest. Depreciation. Equity. Appreciation. Leverage.

8. Low Cost Property Management Solutions/Alternatives

Please feel free to share your comments and questions as well. Looking forward to engaging with you.

Franklin Spees, JD, CCRM, TCS, LEED AP