Don't get too comfortable with property management or this may happen

You can read it all over the BiggerPockets forums in one form or another: if you decide to hire a property manager, you must continue to manage the manager. Recently, I got to learn this lesson the hard way.You see, assumptions can be very dangerous.The old Russian proverb, “Trust, but verify” is just as true when dealing with Real Estate.

Now, I’ll admit that hiring a property manager is a must for someone in my position: a military member currently stationed overseas.There would be almost no way to manage my properties from afar; at least no way to do it responsibly.

BiggerPockets got me incredibly interested in Real Estate investing when I moved to St Louis in 2012.During that time, I purchased four homes ranging from Single Family Residences (SFRs) and Multi-Family Residences (MFRs).After I moved, I received a letter in the mail from a collection agency informing me that I owed $3000 to the Missouri Sewer Department.Say what?!?

Turns out, my property management company had not been paying utilities on two of my properties.One for 6 months, and the other for over a year and a half!Now, you would think that a reputable property management company would have automatic processes in place to catch little things like this.Trust but verify!I have to place much of the blame on myself.I did notice that one of my properties had a sewer allotment, while the other two in question did not.Shame on me!

At the end of the day, it is the responsibility of the owner to ensure the property is being managed correctly.You must analyst your monthly statements, looking for things that look out of place or sound off red flags.Taking action and buying a property, or several, is great, and I wish more people would take that step in order to secure their financial freedom.But you much always continue to take an active role in the management of them so as not to get surprised with a $3000 bill.Don’t make mistake!