@Hanna J. Thank you for your feedback! You raise a couple of really important issues.
1. When people buy "turnkey" property, they often have the expectation that the property will somehow perform differently than any other real estate. Unfortunately, that's just not the case. Tenants are tenants. They may lose their job, suffer illness, and/or be messy.
Also, property management in the U.S. is improving but far from perfect. When we refer people to turnkey companies, we do not have any ownership in those companies and cannot control their actions. All we can rely on is their past performance. This does not guarantee future performance, as people are people. Some companies grow too quickly and suddenly are no longer offering the stellar service they once did.
That's why it is absolutely up to the buyer to do their own due diligence. ALWAYS get appraisals and inspections, no matter who refers you. Always pay attention to your property manager's performance because there's no way I or my team can monitor thousands of properties in dozens of states.
So why work with a network? It is not so that you can have someone take care of you for the life of your property (with no payment for such services...). You pay no more $ for the referral than if you bought on your own. It is because that referral company has had a good relationship with the company up to this point. And if there are problems, there's a good chance the referring company can negotiation on your behalf because most likely they want future referrals. If their services start to suffer or change, then the referring company can stop referring - which means anyone on the referral list would have been recommended by others. It's a lot like Yelp - you probably wouldn't blame Yelp for a bad referral, unless they were giving 5 stars to companies with a poor history.
For what it's worth, those companies that you mention above are no longer on our referral list - and for the same reason. They grew too quickly and started "cutting" corners and not knowing how to scale. They may have started off great but got ahead of their skis, so to speak.
2. The second thing I want to point out is that because of the word "turnkey" people often have false expectations. You must follow the rules of investing. Always have 6 months reserves set aside for emergencies or vacancies. Always perform inspections and appraisals before purchasing. Always, review repairs done by management, asking for before and after photos and receipts. If the PM is late with payment, find out why immediately. I've seen too many PM's grow too quickly and then suddenly find themselves out of cash. They then use tenant money to pay staff or overhead. This is illegal, of course, but desperate people do desperate things. I lost 2 months rent and the tenant's deposit on my Cleveland properties for this reason. But I just used my 6 months reserves and moved on.
3. Finally, I just want to wrap up by saying that we have tightened up our vetting and auditing process to make sure the turnkey companies we recommend are truly walking the talk. This does not mean investors should trust blindly, but does mean we've used our years of experience in seeing turnkey providers failed, and helped educate growing companies on what they should be aware of. In fact, we are having our first mastermind in Nov with the 17 turnkey companies we recommend - to share best practices. It's going to step up the game in a big way.
Thanks for listening, if you made it this far. :-)