By: Paul Simpson
04 November, 2021
Whether you’re a real estate investor with an extensive portfolio or someone who owns properties in various locations, chances are you have a property manager.
Property managers market the property, screen tenant applications, handle maintenance, collect rent, and submit reports to the owner. They can be accommodating. However, like in other kinds of relationships, it’s essential to know when to end it.
What are the signs that you need a new property manager? Take it from the property management expert himself⸺ Paul Simpson.
Clear communication is fundamental in any industry. Unreturned messages and unanswered questions are red flags. The property manager must be responsive to all inquiries. If they can’t communicate with you, and your clients, how do they keep you updated, and take care of the tenants? Remember that even in real estate, poor customer service can be highly detrimental to your business.
Also, consider hiring a new property manager if the current one has a flawed record-keeping system. For future reference, you need to have a copy of all the contracts, receipts, notices, agreements, etc. Thus, having someone who can’t keep these records in place wouldn’t be of help.
A reputable property manager is dedicated to upholding a high occupancy rate. Potential tenants are cautious with properties that have been unoccupied for a long time or have a low retention rate. It makes them question the quality of the property. Is it not as good as advertised? Are there noisy neighbours or safety hazards in the area?
One possible reason for the increasing vacancy rate is the lack of marketing efforts. Your current property manager may be skimping on ads or not doing their jobs well.
It wouldn’t make any sense if your property manager could find new tenants quickly if they fill your properties with unqualified tenants. In addition, if tenants cause damage and disturbance, you may end up paying more for the repair—and sometimes, even legal fees.
They may have deviated from their formerly stringent screening process or are anxious about maintaining vacancy rates. Unfortunately, either isn’t good for your business.
“Your property manager should remit all collections as indicated in the contract. If the cash flow is interrupted, it can signify poor enforcement of rental collection and mishandling of funds. The manager should also be able to provide accurate accounting whenever you request financial information.”, says home loan provider Alister Clare of Credit Capital.
Thus, consider looking for a new one whenever your property manager causes cash flow interruption, no matter how minimal it is.
Many people use the internet to share their experiences regarding a particular product, service, or place. As a result, online reviews have become a massive influencer in the consumers’ decision-making process. So, if your properties are accumulating one or two-star reviews, it’s a tell-tale sign of poor service—which the property manager is responsible for.
A property manager must know local and national laws and regulations about real estate leasing. It is their job to ensure you comply with all of these while handling most of the work.
Evicting tenants without notice, engaging in discriminatory behaviour, and missing deadlines can entangle you with legal problems. Think about hiring a new property manager if you notice they have issues with compliance.
Even the most experienced property management can have a few shortcomings. It happens in all businesses. The most important thing is to be cautious at the very start and select a manager with a proven track record. If something is going beyond your expectation, discuss this openly with the manager right away.
Connect with Paul Simpson for more property management tips.