As a rental property owner, engaging a property manager is often intended to make your investment more passive. If you’re currently looking for property management services, it may be due to dissatisfaction with managing your properties yourself, relocation making distance management difficult, a significant life change, or frustration with your current property manager.
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While property managers are supposed to enhance your investment experience, sometimes their services fall short. Issues like unreturned calls or emails, missed rent payments, or lack of visible management can indicate problems. It’s crucial to identify and address these operational failures before they lead to significant financial losses. This guide will outline what you should expect from a property manager and how to handle the process of transitioning to a new one if necessary.
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Are Your Expectations Being Met?
Clearly defining your property manager’s responsibilities is essential. They should efficiently manage tenant relations, ensure low vacancy rates, address maintenance issues promptly, and maximize profitability. Here are key responsibilities to watch for:
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Tenant Finding and Screening
A property manager should thoroughly screen potential tenants to ensure they are reliable, financially stable, and likely to maintain the property. This includes reviewing applications, advertising, conducting background checks, verifying employment and income, and checking references.
Lease Management and Enforcement
A well-drafted lease agreement is crucial. Your property manager must understand the lease’s terms and enforce them effectively, handling issues such as late payments or property misuse while adhering to local laws.
Rent Collection
Effective rent collection is crucial. Your property manager should communicate rent due dates clearly to tenants and keep you informed about any payment delays or issues. Transparency in communication is key.
How to Move On From Your Current Manager
Identifying issues with your property manager can be challenging. Common red flags include delayed communication, late rent payments, extended vacancy periods, and increased fees. Trust your instincts if you notice these problems.
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Steps to Take:
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Reach Out Again
Try contacting your property manager to resolve any issues before considering a switch. Ensure there are no external factors affecting their response time and clearly communicate your concerns.
Seek a Resolution
If issues persist, escalate the matter within the management company or file a formal complaint. Document your communication attempts to support your case for terminating the contract.
Review Your Management Agreement
Examine your property management agreement for termination clauses and potential fees. Typically, a 30-day written notice is required to terminate the contract.
Steps After Termination
Once you’ve provided notice and handled any termination fees, it’s important to carefully select a new property manager. Tools like the Property Manager Finder by BiggerPockets can simplify this process. However, it’s crucial to ask detailed questions to ensure you find a suitable replacement. Consider asking about their experience, licensing, fees, services, maintenance procedures, tenant screening, and eviction processes.
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Final Thoughts
Many investors delay replacing an ineffective property manager, often incurring significant costs. If your current manager isn’t meeting expectations, it’s essential to address these issues promptly. Understanding your management agreement, communicating clearly, and thoroughly vetting potential new managers will help improve your investment’s performance and resolve any management challenges.
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