Choose your property manager & agent wisely - a cautionary tale

I checked the MLS this morning, as I do just about every morning, and saw a property listed  for sale that I recognized...  I had talked to the owner of a several months back.  In response to my monthly newsletter for investors, the owner of this property requested a comparative market analysis of his multifamily property.  With restricted access for properties with tenants in place it can be challenging to get a good market value of a property you have not been inside.  The owner let me know one side was advertised for rent and had been for about a month.  I was a little surprised by that because my units in that area and price range were renting in less than 2 weeks.  Still, I thought to myself "Great, they will have pictures online and I can see what kind of condition the property is currently in and what kind of upgrades it has."  When I searched for the property online I can't find it anywhere at first but eventually find the property managers website and it is listed there.  This is concerning because just about anywhere you list the property will syndicate the listing out to a dozen sites or more so that you get great exposure to potential renters.  On the property managers website the listing has 1 very low quality photo of the property exterior so I decide to drive by the property when I go check on a renovation I have under way at the time.  When I drive by I can see that the building is a different color than in the picture!!  The building has been painted since the one terrible picture was taken and the PM couldn't be bothered to update the photo online or take any of the interior.  In addition, I noticed that there were big rolls of insulation leaning up against the back of the building so I decide to ask about that as well.  The owner tells me that he paid for the insulation to be installed months ago and he is very concerned that it is still sitting outside in the weather and has not been installed.  The owner and I are both starting to see why the current property manager charges 50-70% of the going rate for management. 

Here is the real disaster...

The owner tells me he isn't quite ready to sell but he appreciates the market information I provided him.  Great, I plan to follow up.  Sadly, I did not do a good job staying in touch with this owner and it appears he just used his property manager to list the property now that he is ready.  Shame on me.  But more so, shame on his discount property manager.  The listing has a small number of very poor quality pictures, the listing just showed up today but the way the agent entered the dates it shows as having been on the market for 44 days(which will make it look stale and negatively impact the negotiation position of the seller), the listing is listed as 0 bed 0 bath, no information is given on the expenses, no information is given on what size and configuration the units are, when the leases end, rents are below market value and the square footage is incorrect(short by 700 sq ft!!!!)  What an absolute disaster of a job by this agent.  This is why Zillow, Purple Bricks, Redfin and others are trying to eliminate real estate agents or at least severely reduce their commissions.  

To the listing agent and property manager - do better or find a new business...  Discounting your rate to provide extremely poor service and likely cost the owner of this property many thousands of dollars makes the entire industry look bad.

To the property owner - you get what you pay for...  Seriously what did you expect for half price service?  Saving $25 per month on management isn't so great if your vacancy is 2-3x what it should be and your property is deteriorating in condition.  Saving $2,000 on commission isn't so great if you sell for $15k less and it takes 3x as long because of poor, incomplete and inaccurate marketing!!

The moral of the story.. Do you homework on your property manager and, when it is time to sell, your real estate agent.  I can tell you from experience that a top quality agent will make your more money than they cost you but a bad agent is a complete waste of money.  Before you choose an agent look at their track record, reviews and current marketing.  If you aren't impressed you should keep looking.  As an investor you have lots of choices, remember that and find someone that is a good fit for you and will do a great job caring for your investment properties.