Although it’s possible to manage your rental properties yourself, doing so isn’t always the best decision, and that’s when hiring a property manager comes in handy.
- Maybe you don’t live near your property and have no one to check on it regularly.
- Maybe you have many rental properties and just don’t have the time to manage them.
- Maybe you simply don’t want to be involved in property management duties and prefer to be only an investor.
The big downside to hiring a property manager is that doing so eats into your bottom line. Landlords typically pay between 8% and 12% of the monthly rent collected to the property manager. But if the property manager does a great job for you, it could be worth the price.
A good property manager will do the following:
- Find quality tenants for your property
- Collect rent
- Let you know when maintenance and repairs are needed
- Arrange for the maintenance and repairs
- Be the contact person for your tenants
- Handle evictions (hopefully it won’t come to that!)
The problem is that some property managers slack off, falling short of their duties. After all, they’re getting paid whether they do the work or not. If your property manager is good only at taking your money and nothing much else, it might be time to kick them to the curb. Here are six ways to tell whether it’s time to fire your property manager.
Related: Should I Hire a Property Manager
1. You Don’t Hear From Your Property Manager
A good property manager should be proactive. They should be on top of things at your property, and they should be reporting to you regularly. You shouldn’t have to ask them about your property or spend a significant amount of time managing the property manager.
It’s even worse if your property manager doesn’t return your calls or emails. It’s difficult to trust that this property manager is doing their job, making this reason enough to fire them.
If you’re not 100% sure that your property manager is doing a good job, then they’re probably not.
2. Your Property Manager Doesn’t Inspect the Property
Property managers typically conduct a yearly inspection inside the property and a quarterly inspection of the exterior. If your property manager isn’t living up to this bargain, it’s time to let them go.
Regular inspections are necessary to ensure your property stays in good shape. You should receive a report that lets you know what sort of repairs are needed, whether there are any code violations, and anything else you would need to know about your property. If you don’t get a detailed inspection report each year, something’s wrong.
If you live near your property, you probably drive by from time to time to make sure everything looks good. But if you don’t live close to your property, you rely on your property manager to be your eyes.
Let’s say you own a single-family home, and your property manager tells you they will drive by your property every three months to check on the home’s exterior. Your tenant has been there for nine months, and you have received no bad news from the property manager. Meanwhile, a friend of yours was in the area and reported to you that the front lawn looks as if it could be on American Pickers or Hoarding: Buried Alive. It appears as if your property manager wasn’t doing what they said they would.
3. Your Tenants Are Left High and Dry
If a tenant complains of a needed repair, your property manager should let you know immediately and then arrange for the job to get done in a timely manner. If your tenant contacts you because they can’t get any help from your property manager, it’s time to fire this manager.
Not making needed repairs will strain the best landlord-tenant relationship. Not to mention if the repair is major enough to make the place uninhabitable, your tenant might have grounds to break the lease.
4. You’re Constantly Getting Bad Tenants
Part of the property manager’s job is to get your property rented … but not just to anyone. If the property manager isn’t doing a good job of screening tenants and is putting deadbeat tenants in your property, it’s time to fire the property manager.
Tip: Before you hire a property manager, ask what percentage of tenants they’ve evicted. This number should be low.
Tenant screening is an integral part of a property manager’s job.
5. You Aren’t Getting a Monthly Report
Every month, your property manager should send you a report of your income and expenses related to your property. The report should list how much rent was collected, how much was deducted in property management fees, how much was taken out for maintenance, etc.
If you aren’t getting detailed reports, ask for them to be sent to you. If you still aren’t getting them after asking for them, you should fire this property manager.
6. They Charge More Than 10%
The industry standard price is 10% of the monthly rent + 1 month’s finder’s fee. However, this price is becoming more and more expensive. Unless you are investing in long-distance properties, you can accomplish everything a property manager does yourself, without having to pay for it.
If you’re interested in saving money, check out Cozy, which offers many of the same DIY property management services – free for landlords, tenants, and property managers.
Consider Managing Your Own Properties
If you observe any signs of a bad property manager, you might wish to first discuss your concerns with your property manager. Your property manager might come through and step up their game.
If you give one more chance and see no improvement, you could probably do much better by hiring a different property manager or even by handling this job yourself.