Real estate investors looking to grow their portfolios often turn to a property management company to relieve much of the day-to-day burden of taking care of the rental property and making sure it is occupied by good-quality tenants. As owners go online to search for a PM company to hire, they likely read company reviews on sites like Bigger Pockets, Yelp, and Google Maps.
What they discover upon landing on these reviews, however, are almost universally negative experiences. This is certainly a problem, and from our perspective, whenever you see that a whole industry is painted with that brush, you have to think about what the bigger issue is – what’s causing an entire industry to be unsatisfactory to consumers in the marketplace?
Factors Contributing to Poor Industry Perceptions of Property Managers
In property management, there are a number of factors at play that impact residents’ and owners’ negative perceptions of property managers.
First, from the tenants’ side, no one likes their landlord. This person is collecting rent, they have control over your residence, and there’s basically no hope of winning over their praise, at least categorically.
From the clients’ side, a lot of dissatisfaction in the industry has to do with a mismatch in expectations. Property owners are learning about real estate investing through the experiences that are delivered by their PM, and there’s a little bit of shoot-the-messenger that goes on.
Property managers have to deliver news about capital expenses and bills and vacancies, and 99 percent of real estate investors haven’t effectively prepared for that. They turn over the rental to a property manager and expect smooth sailing, but when they are faced with new expenses, they blame the property manager because they didn’t know to expect them. This can become a big issue.
Another problem is that PMs serve as the middleman between the residents and the owners, and their interests are opposed. Residents want minimum rent, maximum amenities, same-day repairs, and so on. Owners want maximum rent and minimum expenses. Property managers stand in the middle trying to navigate that. What’s more, PMs have legal and ethical obligations to both sides. The result is that neither party is happy with what the PM has to do in a lot of situations, and this dichotomy plagues the industry’s reputation.
What Owners Should Consider When Hiring a PM
For property owners, despite the negative reputation, there is hope for finding a reputable, trustworthy property management company. Here are a few things you can do as you vet potential PMs for your properties.
- Look for PMs who prioritize transparent communication – No one wants to hear bad news, but when you trust your PM and know they will communicate openly and honestly with you, you can feel confident that they are doing everything they can to ensure your success.
- Ensure your investment philosophy aligns with the PM company.
- Be sure to understand their full range of services – Misunderstandings lead to tension. Ask your PM these questions and any others you have so you are clear about the services you will receive.
At RL Property Management, we offer full-service property management services for single-family and multifamily investors. With us, your tenants can expect exceptional service and you, as owners, can expect a high level of return. To ask your questions, give us a call at 614-725-3059.