When it comes to hiring a property management company, you need to trust them. If you don’t trust that they have your best interests at heart, there’s no value in hiring them in the first place.
Because it’s central to our business to build trust that we want you to be successful with your property investments (whether you work with us or not), we feel it’s important to point out our mistakes and how we address them.
Below is an example of a lesson we learned while growing our property management company here in Franklin County. Perhaps you can also learn from it and get a glimpse into what it’s like to manage rental properties at scale.
We were managing a property for an owner who decided to take advantage of the booming sales market and sell their rental property.
When clients choose to no longer use our services either because they’ve sold the unit or for any other reason, we have a de-management process we follow. Part of that process includes a 30-day accounting close-out period.
Starting from the last day we manage the property, our company takes 30 days to close the books on the unit to make sure we’re dotting all the i’s and crossing all the t’s. During this time we make sure any final vendor invoices that are received get paid, we do our accounting and bank reconciliation for the previous month, and generally take steps to ensure nothing was missed.
Where Things Went Wrong
It was during this 30-day accounting process when things went wrong for us.
Because we were no longer managing the property, the tenant was no longer paying rent to us. An oversight during this close-out period led us to make an unfortunate error in which we inadvertently posted a 3-day eviction notice on this tenant’s door.
It didn’t take long for the horrified (and very angry) tenant to call us about it. This was followed in quick succession by angry calls and emails from the property owner, buyer and realtor – all understandably asking for an explanation as to why we posted an eviction notice on a property we don’t even manage anymore.
After profuse apologies to all parties and especially to the resident who didn’t do anything wrong, we had to do some analysis: How did this happen? Why did this happen? How can we prevent it from happening again?
Our solution has been to add a step in our de-management process to ensure that the person who prepares 3-day notices confirms whether the property has already been de-managed.
While it’s a simple step, it’s not something we previously had on our checklist because when we were only managing 100 units, it never would have happened. On a smaller scale, you have intimate knowledge of all the properties under your watch. When you’re managing at scale, however, different types of problems tend to rear their heads and systems have to be put in place that weren’t necessary before.
Fortunately we haven’t had this problem occur since, and we hope it never will again as it really was an unfortunate situation.
We hope this case study is helpful for you. As always, if you have any questions about property management – the good, the bad and the wish-they-never-would-have-happened scenarios – please let us know by contacting us at RL Property Management.