Why people are firing their property managers
When you own rental property, it's your job to make sure that it's in good hands. If you choose a bad property manager, they'll be responsible for finding new tenants, screening them, maintaining your property, and even managing repairs when they’re needed. A property manager with poor communication skills or customer service experience will also cost you money by not responding quickly to tenant requests or not preparing the house for the new tenant when one moves out. But the #1 reason people are firing their property managers is because the property managers don’t care about their investments as much as they do.
Poor job setting rent prices
It's important to remember that property managers are responsible for setting rents. It's not their job to be the bad guy and charge too much, but it is their job to know what a fair price is and manage accordingly. Too many property managers haven’t been able to set rents at a fair rate — meaning they aren’t fully aware of the market value of your home in comparison with other homes in your area.
If you're having trouble getting a good deal on rent from a prospective tenant (i.e., asking for more than market value), negotiate the deal yourself and use tools that will give you rental market reports like Stessa. You should never feel pressured into agreeing on terms because an unqualified property manager tells you so; this can lead to long-term problems down the road if those terms aren't favorable for you as the landlord.
Leasing to bad tenants
Another reason people are firing their property management companies is because the property managers are incentivized to turnover tenants. The easiest way for property managers to guarantee turnover is by not placing quality tenants. Obviously, you want good tenants who pay rent on time and take care of the property in a manner that you would expect from anyone who rents from you. If this isn't the case, then it's time for a change.
What makes a good tenant? Well, first off, it depends on what type of property you're renting out—so let's just say that we're talking about any residential rental right now (apartments, townhouses, condos). Good tenants are ones who don't cause problems with neighbors or other residents around them; they pay their rent on time; and they don't damage anything while living there (including the building itself). They also keep quiet at night so as not to bother other people in their building or neighborhood! It’s important to not make these 7 mistakes when looking for good tenants.
Poor communication and customer service
A lack of communication or bad customer service is a common reason why people are firing their property management companies. If you are a tenant, it's important that your property manager responds to your calls and emails in a timely fashion. If you're the property manager, it's also important that you respond quickly to tenants' requests for information or repairs. The best way to ensure this happens is by setting up a communication channel (email, text, phone, or app like Comfortly) specifically for tenant communications so that tenants and landlords know where to communicate. More importantly, a history of communications between landlord and tenant are always useful.
One study shows that poor communication costs businesses $1 trillion annually in lost productivity - so even if there aren't any other big problems with your current situation, just being able to guarantee good communication could save your real estate investment money!
Failure to prepare the property for the next tenant
Property managers can be helpful here, but remember, most are incentivized to turnover tenants because they make more money on new leases than lease renewals.
Failure to diligently manage properties
We’ve heard dozens of horror stories now about property managers who simply do not manage the properties as promised. Poor communication with the homeowner and tenant, missed inspections, poor management of repairs, and more. These failures are unfortunately commonplace today, and is a large part why people have been firing their property managers.
There is no doubt that property management is a high-stakes business. If you choose poorly, you're taking a big risk with your investment.
That’s why more real estate investors are choosing to set up their own tools, processes, and teams to manage their properties. It’s easier than ever before.