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Top 10 Signs Of A Bad Property Manager
Owning rental properties can create a super lucrative income. It falls under the category of “passive income” that is sought after by some of the smartest investors. However, not everyone is cut out to be a landlord, and many opt to dish off the responsibilities by hiring a property management company. But, as in many other industries, there may come a time when a contractor isn’t cutting the mustard, and it’s time to kick’em to the curb. Here are the top ten warning signs of a bad property manager:
Before you hire:
1. They don’t provide references.
If the property manager is unwilling or unable to provide names and contact information of former clients and/or property owners, it would be best to strike them from your list of prospects. This will save you from an inexperienced or untrustworthy property manager.
2. They seem desperate.
If they are pressuring you to hire them or make an impulsive decision in your first conversation, this shows that they are more interested in the sale than in you, and may be desperate for contracts. Also, if they’re hanging signs that say “Two Months Free Rent with a New Lease!” they might be struggling to fill their rentals.
3. Sketchy licensing.
Most states require property managers to be licensed real estate brokers (or a licensed real estate salesperson) if they are collecting rent, listing available properties or negotiating leases. Most states have a license check system available to the public that lists anyone holding such a license. If the company is not on this list, and or their documents appear to be forged you should not consider them as a candidate.
4. Inefficient systems.
If the property manager’s office is stacked with loose paperwork, this is a huge red flag. Today’s most competent property managers use technology to make their processes more efficient. Available software tracks property financials, generates tax reports, highlights tenant payment habits and stores lease terms and tenant correspondence. Without these systems, the management of more than a few properties could be very easily bungled.
After you hire:
5. Tenant complaints reach you.
One of the main reasons to hire a property manager is to avoid dealing with tenant issues. It is their job to handle any requests made by the tenant. If somehow these requests reach you, this might indicate that your property manager is not available or receptive to your tenant(s), and should be considered a violation of your agreement.
6. Maintenance issues.
Having run-down or dumpy properties is no way to invite good tenants. If you stop by and notice that your properties don’t look cared for, you’ll have a bone to pick with your management company. If they are ignoring safety issues you wind up being sued. This is another major reason why you would hire a property manager; so you don’t have to maintain the property. At the very least you have a monitoring issue, and at worst they could be pocketing your investment in upkeep.
7. Lack of communication.
This is a major warning sign. If you find yourself having to chase the property manager to get basic answers, they’re probably avoiding you. You’re paying for their service and you deserve prompt communications and response. Failing to communicate the information you need is unacceptable. If you can’t get regular updates this is another sign they need to go.
8. Late reports.
Regularly receiving late reports is a sign that your property manager is overwhelmed, unorganized or just plain lazy. You could be missing some of your rental income, or they could be hiding problems from you. Not only does this signify a serious management problem, it could also expose you to tax violations for incorrect or inadequate financial information regarding your rental property income.
9. Violations in compliance.
Rental properties, apartments especially, need to meet various municipal 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 actively avoiding these violations and you receive more than one citation, it’s high time to get a better manager because these issues are very avoidable.
10. Inconsistent cash flow.
Some fluctuations are expected – this isn’t a perfect world, but as long as your property manager is doing their job well, there shouldn’t be too many vacancies. Good managers are honest and work on a tight, regular schedule. However, if you are seeing frequent inconsistencies in your rental cash flow, the most important aspect of your arrangement, this could be a sign of incompetence or theft, and you should let your property manager go.
Once you weed out the weirdos you should be able to find yourself a property manager who maintains attractive rentals, retains happy tenants and keeps the cash flowing.
Carnahan Property Managementservices Woodland Hills,West Hills, Calabasas, Canoga Park, Tarzana, Reseda,Porter Ranch, Topanga, Encino, Northridge, Van Nuys,North Hills,Chatsworth, Sherman Oaks, Studio City, North Hollywood, West Hollywood, San Fernando Valley, Granada Hills, Mission Hills, Simi Valley, West Lake Village, Agoura,Toluca Lake, Valley Village, Burbank. Call us at (818) 884-1500 and check if we can serve your area.
