Six Signs You Should Look for a New Property Management Company

While tenants and various kinds of armchair advocates like to complain that landlords don’t “do anything” to earn their income, such a sentiment couldn’t be further from the truth. In reality, landlording can be one of the most challenging jobs out there. From property upkeep and tenant troubles to ordinance compliance and simple time management, making all of the proverbial pieces fit is anything but easy. That’s why so many property owners make the decision to hire a property manager.

Unfortunately, they can also end up facing plenty of property management pitfalls even if they choose a professional management service. Not every company has your best interests at heart, and wise property management company selection can mean the difference between a successful investment and a miserable, money-losing experience. In this post, we will discuss what to expect from a property management company and when you should consider hiring a new property management company.

What to Look for When Hiring a New Property Management Company

Occasionally, we run into clients who wonder how to interview property managers or what exactly they ought to look for in a property manager. Fortunately, that isn’t hard to answer — although putting it into practice might prove challenging. Some of the things you should look for include:

• Ample experience. The longer a property manager has remained in business, the better. Fly-by-night operations simply can’t provide the sort of service that virtually all commercial property owners need.
• Professional connections. Keeping a property running requires more than just addressing common property management maintenance issues. Good managers will need to have a whole host of contacts, and you should find out who and what potential managers know.
• Regular communication. While a new property manager needn’t become your best friend, you should place a high priority on prompt, professional, and informative communication.
• Prompt payment. Having reliable cash flow is one of the most important parts of property management — and lacking it can put you in a real bind. You may find all sorts of types of property management companies, but they should have one thing in common: They pay you promptly each and every time.

Perhaps reviewing these points alerts you to the fact that your current property management company hasn’t pulled its weight and that you need a change. Don’t move too fast, though. You should take a number of prior steps to ensure that your parting stays professional.

Can I Change my Current Property Management Company?

When people ask if it’s possible to change their current property management companies, we like to answer with a qualified yes. Naturally, you aren’t forever wedded to a particular organization. Yet you still will want to take the initial step of trying to reconcile whatever challenges you face with your current company. Start by listing your concerns regarding your property or properties. Then present them to your management company in writing and ask for a schedule of improvement. This provides a concrete goal for you both to work toward.

If your management company still fails to make the mark, you’ll want to examine your contract. In fact, make sure to have legal counsel or another real estate professional examine it in detail. Many contracts contain termination clauses that carry hefty fines or various binding restrictions. Know what you’re getting into before you take the final step.

Finally, when you’ve decided that your current property management firm simply won’t cut it anymore, it’s time to take definitive steps to move on. Start by creating a proposal that includes vital information such as the age and size of your building(s), its usage, and any upcoming projects or improvements. Next, compile a list of queries. These may involve HOA management interview questions or broader inquiries designed for broader-based buildings.

When Should You Hire a New Property Management Company?

Still unsure about whether you and your current property management company should part ways? Consider the circumstances surrounding your properties and see if they match up with what constitutes a good management company — or a bad one. If you find yourself facing some of the following six factors, we’d urge you to start looking for a different manager.

Low-quality tenants. Having a bad tenant is bad enough for residential rentals. However, when you’re dealing with commercial real estate, an unimpressive tenant can prove particularly problematic. Commercial properties often require much more prep work in order to accommodate new tenants, and property owners someone absorb a portion or all of this expense. Poorly screened tenants may also damage your property or have to be evicted, requiring substantial legal fees. Tenant marketing matters, and if you repeatedly find yourself with sub-part tenants, your management company is likely not pulling its weight.

Copious complaints. In the age of social media, it’s easier than ever for unhappy individuals to vent their spleen. While such kvetching can seem awkward whether you discover it online, in print, or during a phone call from an irritated tenant, it’s actually invaluable information. Complaining tenants may bring to your attention things such as slowly fulfilled maintenance requests and inadequate communication, hallmarks of a poor management company.

Increasingly frequent vacancies. Management companies that don’t take care of tenants can’t typically keep them in your property. When vacancies start to soar and you can’t find any discernible cause for it, look to your management company.

Mounting maintenance expenses. A canny manager should estimate the remaining effective life of the fixtures around your property and plan for anticipated maintenance. A slapdash one will wait until a crisis rears its ugly head and then will throw together the cheapest and most expedient solution possible. This will eventually lead to mounting maintenance expenses — and the search for a new manager.

Uneven cash flow. We alluded to this in this post’s second section, but allow us to offer the reminder that cash flow is the lifeblood of your business. If a management company repeatedly fails to provide you with your cash in a timely manner, consider other options.

A lack of communication. While we've already discussed this above, it bears repeating. Most of the problems we've outlined can be solved as long as you and your management company keep talking. When communication breaks down, though, consider all hope lost as far as your current management arrangement is concerned.

If you’re in need of a new management company, contact us. Millennium Properties has helped sole proprietors and large institutions alike successfully manage real estate portfolios of every size.