Do I Really Need A Property Manager?

By
Real Estate Agent with Home Smart Evergreen Realty

Having rental properties can produce a super profitable revenue. This falls under the type of "passive income" that is actually searched for by several of the most intelligent investors. However, not every one is cut out to be a landlord, and many opt to dish off the obligations by working with a property management company. But, as in many other markets, there could come a time when a contractor isn't making the cut, and it's time to kick 'em to the curb. Here are literally the top ten warning signs of a poor property manager: Before you work with:1. They really don't provide references.If the property manager hesitates or unable to offer names and contact information of former clients and/or property owners, it would be better to strike them from your list of prospects. This will spare you from an inexperienced or untrustworthy manager.2. They appear desperate.If they are pressuring you to work with them or make an impulsive decision in your first conversation, this demonstrates to that they are definitely more interested in the sale than in you, and might be desperate for contracts. Also, if they're putting up signs which state "Two Months Totally free Lease with a New Lease!" they might be struggling to fill their rentals

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3. Questionable licensing.Most states need property managers to be licensed real estate brokers (or a licensed real estate salesperson) if they are picking up rental payment, listing offered properties or negotiating leases. Most states have a license check system available to everyone that lists any individual holding such a license. If the company is not on this specific list, and or their files seem forged you should not consider them as a candidate.4. Inefficient systems.If the property manager's business office is stacked with loose paperwork, this is a huge red flag. These days's most qualified property managers utilize modern technology to make their processes more efficient. Available software tracks property financials, creates tax reports, highlights tenant payment practices and stores contract terms and renter correspondence. Without these systems, the management of more than just a few properties could be very easily bungled.After you work with:5. Tenant issues reach you.One of the main reasons to employ a property manager is simply to prevent dealing with tenant issues. It is their responsibility to handle any requests made by the tenant. If somehow these demands reach you, this might suggest that your property manager is not readily available or receptive to your tenant(s), and should be considered a violation of your contract.6. Maintenance issues.Having run-down or dumpy properties is no way to invite good tenants. If you stop by and discover that your homes don't appear cared for, you'll have a bone to pick with your management company. If they are neglecting security issues you end up being definitely sued. This is another top reason why you would hire a property manager; so you really don't need to take care of the property. At the very least you have a monitoring issue, and at worst they could be pocketing your investment in maintenance.7. Inadequate of communication.This is really a huge indication. If you find yourself needing to go after the property manager to get basic answers, they're possibly avoiding you. You're paying for their service and you are entitled to prompt communications and response. Failing to relate the relevant information you want is unacceptable. If you can't get regular up-date this is another sign they need to go.8. Late reports.Regularly receiving late reports is an indication that your property manager is swamped, unorganized or just plain lazy. You could be missing out on some of your rental income, or they could be hiding issues from you. Not only does this signify a serious management issue, it could additionally expose you to tax violations for inaccurate or inadequate financial information regarding your rental property income.

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9. Violations in compliance.Rental properties, apartments especially, need to meet different local codes, and part of the property manager's job is to check for compliance issues. If a regulatory authority inspects your property and finds it in violation, you will be cited. If your property manager is not proactively preventing these violations and you receive more than one citation, it's high time to get a better manager due to the fact that these problems are very avoidable.10. Irregular cash flow.Some variations are expected - this isn't really a perfect world, but just as long as your property manager is doing their task well, there shouldn't be a lot of vacancies. Good managers are honest and work on a strict, regular schedule. However, if you are seeing regular inconsistencies in your rental cash flow, the most important aspect of your agreement, this could be an indication of incompetence or theft, and you must let your property manager go.Once you weed out the weirdos you should manage to find yourself a property manager who preserves attractive rentals, retains happy renters and maintains the cash flowin.'More Information: Hadi Bahadori Realty One Group (949) 610-5720

Comments (1)

Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

As the local rent has hit the ceiling and I know a rental home can cost $20,000 a month in SF.  It is not common to get people to remove existing tenants and get a new tenant at current market rent. 

 

Jul 15, 2016 06:39 AM