Property Managers: Who Needs Them?

Real Estate Broker/Owner with Providence Group Realty TREC# 0608931

We frequently get calls from landlords who are desperate to get out from under their "rental homes gone wrong." The names change, but the stories tend to follow a common thread... They have problem tenants, deteriorating property conditions, and a "property manager" who isn't doing much more than depositing the monthly rent check when it comes.

Those who read TREC's disciplinary history will quickly learn that 'property management' is a chief category for consumer complaints. Making a poor hiring decision when it comes to property management can be costly. It can cost an unwitting property owner monthly cash flow, equity lost to repairs and renovations, and subject them to avoidable risks relating to lawsuits pertaining to health and safety violations.

Who Needs a Property Manager?

Anyone who isn't willing to take on the full responsibility of managing a property themselves, dealing with tenants, and/or learning what is required of them under Texas Property Code needs a Professional Property Manager. Most DIY Landlords who want to save the money end up learning this lesson the hard way. Sure, if you are a 'set it and forget it' kind of landlord, you won't be any worse off than you would be by hiring a s 'set it and forget it' kind of property manager... But a professional property manager can earn their keep a thousand times over.

What Are The Qualities I Should Look For In Hiring The Right Property Manager?

To begin, property management services in Texas require a Texas real estate license. If you are dealing with someone who isn't licensed, that is mistake #1. Also, being related to someone who holds a Texas Real Estate License does not make them licensed... Search for the individual you are working with on TREC's website to make sure they actually hold an active license, and they are in good standing with no disciplinary history relating to their practice.

If you are dealing with a licensed salesperson who isn't the Broker for the Property Management Company, check to make sure their accounting is set up to go through the Broker. Salespeople are not authorized to hold bank accounts in their own names (or company names) for the purpose of handling client funds. Any bank accounts used to deposit client monies must be held in a designated Trust Account by the Broker, in the name of the Broker. If money is filtering through the salesperson, you've got a problem on your hands.

A professional property manager will:

  • readily offer standard screening criteria, and assist you with customizing it to meet your needs while maintaining compliance with Fair Housing Laws. 

  • have an established system to facilitate application submission and a screening process that will help ensure an informed decision regarding acceptance. A professional screening process will include reports for rental, criminal, and credit history. The application process should not be predatory, and should not "automatically" or "systematically" require applicants to sign things online that they don't have the benefit of reviewing prior to the application process, or require them to fork out application fees when a 'soft screen' is first requested.

  • be set up to provide regular periodic accounting, including monthly, quarterly and annual statements. When you are interviewing property managers, ask what software is used to provide this expected level of service. Professionals will be quick to answer about their tools and reporting services, while amateurs and pretenders will fumble and provide vague or generic answers.

  • be equipped with a property management plan to proactively manage property condition under tenancy.  Property condition is not managed by emergency. Ask to see a copy of a standard lease agreement to review the normal duties that will be expected of the tenant (e.g., hvac maintenance, foundation watering, lawn care, pest control), and ask how the property manager performs periodic inspection to make sure the terms of the lease are being honored and the property will be maintained.

  • have in-house staff to perform duties relating to tenant management. From repair requests to house calls, excellent customer service creates good will between a landlord and a tenant, which usually results in a positive rental experience for both parties. Our advice is to "secret shop" your property manager. Whether their advertised process is an online website to request property information, collect rents, or submit repair requests -- or whether it is a dedicated phone number to contact their office, try them out for response time, attitude, and tone. Folks who promise one thing to get your business and then fail to deliver under contract don't deserve your business. They will cost you money.

  • practice in accordance with Texas Property Code and other governmental regulations, and require compliance with health and safety standards. If the property manager you are interviewing cannot cite what is required at State, County and City levels, or cannot explain to you the rationale behind the requirements. RUN. The last thing any landlord needs is a property manager who fails to protect them by ignoring the most basic of safety requirements (e.g., keyless deadbolt locks, smoke detectors, etc...). The "favor" of ignorance or looking the other way to save money in these areas can be a very costly mistake if you end up in a personal injury lawsuit.

  • have strategies for handling the worst of times. Let's face it, things don't always work out as we plan. Even the best property manager cannot control the behavior or lives of other individuals. When disaster strikes (non-paying tenant, family violence, code violations, broken leases, condition nightmares), a professional property manager will know how to handle the situation and get things back on course as quickly as possible. Established policies and enforcement protocols need to be a part of the property management plan. A pro will have commanding knowledge regarding the eviction process, and will have quick access to referral sources and subject matter experts if needed. If your questions about experience with policy enforcement or the eviction process are met with silence or delay, use caution.

  • have favorable reviews and testimonials from both landlords and tenants. Check reviews online, and with the Better Business Bureau. Ask for client referrals, and then call them for feedback. You will be amazed at what you can learn by following up. Problems are like cockroaches... If you find a few complaints online, then recognized that there will be many more where those came from. 

Hiring a licensed, Professional Property Manager can be a very wise choice. We don't currently practice full service property management at Providence Group Realty, but if we did, we would do it like our colleagues at North Texas Rent Homes or Schuller Properties. If you are seeking the services of a professional who will earn their keep, check them out. You'll thank us later!


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Show All Comments
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Amanda, anyone thinking of purchasing investment properties needs to read this post and fully realize that not correctly managing their rentals can be quite a costly affair! 

I just loved this line as it is easily the best of the day on AR:

 Sure, if you are a 'set it and forget it' kind of landlord, you won't be any worse off than you would be by hiring a  'set it and forget it' kind of property manager . . .

Have a great day with your family down in The Metroplex, and say "Hi" to Mark Cuban for me!

Apr 26, 2015 02:58 AM #1
Amanda Thomas
Providence Group Realty - Plano, TX
​Broker, SRES®, BPOR, MCNE, ​Certified DRS Agent™

Bruce Walter, thank you for your comment. And I will most certainly drop your name next time Mark and I meet. Gotta' bring out the big guns when the opportunity permits! #keepitwindyinIndy <3

Apr 26, 2015 03:01 AM #2
Lenn Harley
Lenn Harley,, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Who needs property managers?

Anyone who has property to manage.

Apr 26, 2015 03:19 AM #3
Amanda Thomas
Providence Group Realty - Plano, TX
​Broker, SRES®, BPOR, MCNE, ​Certified DRS Agent™

Lenn Harley, actually, there are many Texas property owners who choose to self-manage their portfolio of investment homes. It is hit or miss on quality, though. Most people never take the time to learn requirements under Texas Property Code or local requirements, and operate in unnecessary risk and liability. On the flip side, all property managers are not created equal. Committing to managing a property is a big resonsibility. Many licensees don't really provide the additional value they should under PM contracts. Until consumers demand better, sadly, we probably won't see industry improvement.

Apr 26, 2015 03:59 AM #4
Robert Smith
Preview Properties, PC - - Brighton, MI
SRES, Search for Homes Brighton-Howell-SE Michigan

Amanda Thomas, I have been recommending property managers to clients and friends for a while now.

At one point, years ago, I self-managed 7 residential units.  It is time consuming and if you err on your tenant selection it can be a mess. 

Apr 26, 2015 03:59 AM #5
Amanda Thomas
Providence Group Realty - Plano, TX
​Broker, SRES®, BPOR, MCNE, ​Certified DRS Agent™

Amen, Robert Smith! Many newbie investors think property management is sticking a 'for lease' sign in the yard and raking in the dough. We pay for our learning, one way or another.

Apr 26, 2015 04:10 AM #6
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Amanda Thomas

​Broker, SRES®, BPOR, MCNE, ​Certified DRS Agent™
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