How to know when your vacation rental management company is stealing.

After a 15 year successful career traveling the US in the convenience store industry in sales & management for large distributors & manufacturers, I “retired” to my favorite spot for the gorgeous beaches, sweet friends, and Florida lifestyle to Panama City Beach, Fl. It wasn’t long before I bought my first investment condo and started a couple of small businesses being the entrepreneur I was destined to be while raising 2 young boys.

At the same time I held a full time job over the last three years working for the top 2 property management companies in the US signing hundreds of homeowners in the Panhandle. I was top in sales at each company and built an incredible client base while onboarding homes, condos, cottages, studios and preparing these little slices of real estate to be profitable small businesses for their investor owners. I worked with a lot of brand new investors learning like I was with my first condo, and I worked with some very experienced investors who helped show me the ropes.

I was fired at both companies for whistleblowing.

Both companies had employees stealing from my clients (supposedly my attorney said to add) and I’m not a big fan of lying or stealing in general much less from my own clients. I had built a successful career by being client focused going above and beyond, brutally honest, and always trying to do the right thing.

So here is how to monitor your property management company - which I 100% recommend!

1. Check your statements! The #1 way they steal is to charge for things they aren’t doing. Look for a property management company that shows you proof of work performed. If they say they cleaned the carpet - ask for an invoice from the company they hired and photographic evidence of the job performed. If they say they pressure washed the front deck - get an invoice and photos. Deep cleans - you want proof or to have someone to spot check behind them. We live in a beautiful world of technology where video calls are routine. They can easily show you what they are doing! Do not accept their statement without documentation.

2. Have a local friend or neighbor spot check the empty dates against your calendar. I can’t tell you how many times I saw managers renting units “off book.” This means they collected for rentals in cash and used your property without letting you know. It happens often. Not only are you liable for the property regardless, you aren’t making money on your asset while they are using it for pocket money.

3. Use a doorbell camera system. If they won’t let you, what do they have to hide? You cannot use cameras inside the home, but outside is fine if you disengage the audio.

4. Use a remote controlled thermostat. Savvy investors use this to monitor not only the costs of their units, but the use of the property when no one is in the unit. One of my clients found a former cleaner living in her unit this way.

5. Hire a local company whose owners own properties. Time & again I’ve seen the greatest success with small businesses whose owners understand exactly what it is to own properties and self manage before starting to manage for other owners. I have dear friends and clients who do this very successfully.

6. Ask for their churn rate. How many customers did they lose last year? Both of the companies I worked for lost customers faster than I could onboard new ones. Their churn rates were well over 50%. There will always be churn in property management as people buy & sell or re-locate or have a friend start a new company, but there should never be a 50%+ churn rate unless they have the wrong staff stealing and lying!

The last company I worked for had an operations manager who's own husband ran their maintenance company and sister ran their cleaning company. She was billing on both sides for work not performed. I had complaints from dozens of clients and the company refused to do anything about it. Find out which vendors your property managers use for cleaning & maintenance and if there is any conflict of interest like this - run!

The first company I worked for (the largest PM company in the US) had sales managers stealing referral fees from owners or realtors, and the upper level managers were getting a cut of the off book rentals. They promised the moon and delivered subpar service to both guests & owners along with the thievery.

After 15 years in corporate America where I personally fired people for theft or lack of ability to meet client expectations, I have been appalled by the level of corruption in this new industry I am in & the subpar service level that is acceptable. Property management is HARD because there are a lot of moving parts and you are graded on multiple levels of performance. You are graded by guests in a home, owners who own the home AND employees who are responsible to maintain the home. Yet, in this beautiful age of technology you can streamline the majority of this just by having the right systems in place.

Property management is a partnership in a small business really. You are hiring someone to manage your asset and oftentimes this asset is the largest asset you own other than your own home. Choose your partner wisely & happy investing!