5 Reasons you should not use a Property Manager

Hi property owners, I’m going to give you some reasons why you might not want to use a property manager.

 

I’m Kyle here at TrueDoor Property Management and full disclosure, yes I am a property manager. There’s a lot of benefits from using a property manager, but in this article  will go over 5 reasons why it might not be a good fit for you. Over the last fourteen years we’ve worked with thousands of clients who own rental properties in Orange County. I’ve learned there are some situations where it’s better for a property owner to self manage.

Rental property owners should be aware that good property management companies follow a structured approach to taking care of a property, this helps to deliver a standard of professional service and keep the property owner out of legal issues. If the property owner is not aligned with a property manager’s approach, the property owner can end up feeling unsatisfied. 

 

Reason #1: You want to pick the tenant.

 

Some property owners don’t like the idea of a management company select a tenant. I understand the concern. You own the property and made the investment. Getting the right tenant is a high priority and you want to make sure its done right. It’s your property manager’s job to keep you out of trouble and we do that by carefully following Fair Housing’s strict guidelines on screening and selecting tenants.

I appreciate that you want to be involved here, but an experienced property manager is probably better than you at selecting tenants and is experienced in avoiding fair housing complaints. This being said, if you have experience screening and selecting tenants, you probably don’t need a property manager to do it for you.

Here’s how a good property management company will choose a tenant. First, we start with a clear and transparent application criteria. ex) a minimum income requirement, a minimum credit score requirement, etc. A prospective tenant that applies and meets your clearly set criteria should not be denied (yes, even if you don’t like their car!). Be aware that many property managers are willing to work with you on tenant selection as long as you don’t put them in a situation where they have to deny an applicant who meets all the asking criteria and should not be denied. But, if you’re a landlord that doesn’t need or want a property manager’s guidance on tenant selection, I think you’ll be happier doing it on your own.

 

Reason #2: You want to meet the tenant.

 

Some rental property owners want to meet the tenant in person. Clients have asked for this because they hope that by meeting the tenant they can get comfortable with the person living in their rental. Property Managers don’t want you to meet the tenant because it can open a line of communication between the landlord and tenant that makes our job really difficult. It’s hard to do our job if a tenant is getting information from the landlord that we are not aware of. The biggest problem is that tenants will go directly to the landlord when they don’t like the answer from the Property Manager. It’s like my kids coming to me when mom says no.

When a tenant has access to the property owner, our client, the property owner isn’t really getting what they are paying for. Our clients like using a manager so they don’t have to deal with being a landlord. If you are the property owner who really wants to meet the tenant, I don’t recommend you use a property manager.

 

Reason #3: You want to be involved in every decision. .

 

A property manager is not a good fit if you’re a property owner that wants to be very involved in the day-to-day. If you’re a landlord that wants to be notified of every interaction with the tenant, you probably would be better off managing it yourself. For example, a tenant might have an issue with a neighbor, or have a question about their lease, or request maintenance that isn’t necessary. There’s often communication with the tenant around rent collection, negotiations around the lease renewal, a lot of back-and-forth about maintenance coordination. We’ve had clients that want an update on every action, and some that are overbearing on the tenant’s experience.

If you decide to use a property manager, you will be giving up some control. Of course a good manager will update you on major items, such as significant maintenance items, rent increases and lease renewals, etc., but be aware that most of the interaction and day-to-day management will be done without you.

 

Reason #4: You want to control every detail of the maintenance

 

Many property owners are accustomed to having a lot of control over maintenance in their rental. Self-managing landlords spend a lot of time coordinating, and reviewing repairs. I completely understand why. Maintenance is a big expense and nobody wants to do more than what is required. There’s also a certain amount of mistrust between a landlord and tenant around maintenance. Landlords have a reputation for taking too long or avoiding needed repairs. Tenants have a reputation of asking for unnecessary maintenance.

If you want to use a property management company, you will need to trust that they are making the right decisions. If you’re not willing to let go of every detail and allow the property manager space to make decisions, I don’t recommend you use a property manager.

Good property management companies have experienced staff members that will make a lot of decisions on your behalf. Of course the property manager will contact you for larger dollar amount repairs, but it’s typical to see managers make decisions on repairs in the $200-$400 range. Emergency repairs that occur after hours can be expensive and require the property manager to make decisions on the spot. So if you prefer to make every decision on your own, I don’t recommend you use a property manager.

 

Reason #5: You want the cheapest price on maintenance

 

We all want a good deal on maintenance work at our rental properties, but if you demand the cheapest price, using a property manager is not right for you.  The vendors who provide the cheapest price on maintenance typically fall into the following categories: 1. They are cheap because they are not reliable and don’t complete work in a timely manner. You might be okay to deal with an unreliable vendor on your own, but a management company has to be efficient and trust that the maintenance providers will get the job done quickly and correctly. 2. The maintenance is cheap because the vendor is not licensed and insured. You as an individual might be okay to take on some risk of an unlicensed/uninsured vendor, but you have to remember that it’s the property manager’s responsibility to keep you out of trouble. A property management company will use licensed vendors because over the long run you will avoid problems and possible lawsuits from vendors and tenants. 3. The vendor will provide you with cheap pricing at the beginning, then increase it over time.

The main message here is that good maintenance is rarely cheap. I’m not saying a property manager will only use expensive vendors. What I am saying is that reliable vendors that are licensed and insured will charge a fair price and rarely are the cheapest option.

 

In conclusion, using a property management company isn’t for everyone. Most property owners that self manage do so because they prefer to maintain control over the daily decisions. If you’re a property owner that doesn’t have the time or expertise, then using a management company can be a great option.