@Michael Smythe Thanks for the nod to NARPM. I saw them on BP, but shied away when they asked for contact info before agreeing to talk to me. That's usually a red flag that I may be dealing with someone less than trustworthy. But, if someone with your experience is recommending them I'll give them another look.
As to due diligence and not hating PMs... I almost put more info up in the original post, but decided to keep it short and simple. Anyway, here goes. This might help others.
I purchased my first rental property in 2008. I now have 15 properties in 3 states, none in the one I live in. I've dealt with so many different property managers I literally have lost track of the actual count. And, oh boy, can I tell you some horror stories. The point is, I've got a pretty good idea of what PMs do and don't do.
It's the experience from those horror stories, that lets me know the property manager in question is struggling and likely going to fail as a business. They are slowly moving up my list of worst PM stories to tell. So I'm looking to move on before they get near to or pass the top of that list. But, they are nice people, and have performed well in the past. I didn't want to go into too many details about them here on BP where the negative comments will be enshrined forever.
And yes, I have discussed the issues with the property manager. They understand and acknowledge the issues. But unfortunately, don't have good answers right now.
Now... lest someone think I don't like property managers...
I am a huge proponent of property managers. Every single one of my investment properties over 17 years of investing has been managed by PMs from the start.
- My rentals are meant to be passive investments, and PMs are a crucial part of me not having to do anything other than sit back and get a check every month.
-PMs also know their local markets better than I do, allowing them to get me better tenants, better rents, and better contractors than I can. In fact, most of my investment properties were introduced to me by property managers who where aware of what was happening in their markets and what I was looking for.
-They also understand local laws and customs and help me avoid costly legal mistakes.
- Perhaps most importantly, a good PM knows when to tell the owner to stop whining and write the damn check.
PMs are the middle man between the owners and the tenants. Importantly, they have to advocate for both parties, keep both parties happy, and implement fair and equitable arrangements between everyone.
Property management is a hard job. So hard that most PMs aren't very good at it. My experience says that for every good PM I find, I have to go through 2-3 bad ones. For those of you still reading, here are some things to look out for...
- Delays in getting the rent money to the owner. If the PM is not getting the rent to you within one month, something VERY bad is going on: Either gross incompetence, negligence, or out right fraud. Get away as quickly as possible.
- Excessive repairs on properties. Many PMs get a kickback from the contractor that gets hired as a thank you for giving them the work. This means the PM is incentivized to find repairs that are needed in the rental. I've had PMs that had very low monthly fees, because these contractor kickbacks were actually their primary source of revenue. Avoid these types of PMs.
- Excessive complaints from tenants. Go to these forums, the BBB, and other sites to see what renters are saying about the PM. Remember that the PM is an advocate for both the owner and the tenant. Unhappy renters ultimately result in lower profits. Keep in mind that renters hate the PM in general because they have to write a check to them every month. Look for egregious complaints from the renters that are not addressed adequately by the PM.
Again, I can not stress enough how important finding a good property manager is. I hope my musings help someone.
