Prospective landlords often believe that trusting a property manager to oversee their investment property is the best course of action. But hiring a poor property manager can be a risky move if they turn good tenants into nightmare tenants.
There are three good reasons why a poor property manager is a risk to your sanity and bottom line.
1. Rental property managers are often the new kid on the block
Real estate agencies often throw new recruits into property management to test their mettle. This makes sense for the real estate agency because they get to trial inexperienced workers without exposing them to jobs involving large commissions and important clients. From a landlord’s perspective, however, this can be disastrous.
If you are considering taking on a Property Manager, take the time to ask:
- Who will be handling my investment?
- How long have they been in the job?
- How much experience have they had?
- Will they be staying in the position for the foreseeable future?
These questions should at least help you to identify whether your new Property Manager is still wet behind the ears.
2. Let’s play Chinese Whispers
Communication issues are a common reason why the relationship between a landlord and tenant breaks down when property managers act as middlemen.
An inexperienced or poor Property manager can fail to maintain the lines of communication between tenant and landlord.
Maybe they don’t have enough experience to discern which issues can snowball; maybe they don’t keep good records, or maybe they are just so busy that tasks start to fall through the cracks. Either way, it may mean that when a tenant informs a property manager of an issue, there’s a good chance that the property manager will fail to pass that message on to the landlord or make false promises to the tenant on the landlord’s behalf.
Sadly, if a landlord is left in the dark, they can’t act to rectify issues or follow through on promises!
Even in situations where the issue may be minor, the tenant can feel as if they’re not being heard, and their concerns are not being properly addressed if they are ignored. Just like any other relationship, poor communication skills can easily foster ill will between a tenant and landlord, resulting in good tenants beginning to behave in an increasingly difficult, defensive manner.
It’s also important to keep in mind that small issues can escalate and become major maintenance problems if not addressed immediately. For example, a few cracked bathroom tiles can be fixed relatively easily but major water damage because of seepage under the cracks can be far more expensive and intrusive. A property manager’s inability to adequately communicate between the parties can have serious ramifications for the integrity of your investment property!
3. There’s no skin in the game
There is no denying that a landlord and tenant have a vested interest in maintaining the space (or the property) and building a mutually beneficial and respectful relationship. They need each other: the tenant needs a nice place to live that works the way it should (hot water, non-leaky roof, doors and windows that lock and so forth) and the Landlord wants a tenant who will care for their investment.
A smart landlord views the tenants as their customer and is motivated to take steps to keep them happy and their properties well-maintained.
Poor Property managers, on the other hand, often view tenants as a necessary evil and believe that the landlord is their sole customer. It’s pretty easy to see how these two divergent viewpoints can result in a very different relationship between the tenant and the Landlord.
So should you Do-It-Yourself or hire a Property Manager?
Ultimately whether you decide to manage your investment property or hand it over to someone else is up to you. Real estate agents would have you believe that it’s all incredibly difficult and time-consuming to manage your investment property but if that’s the case then why are they so keen to get so many on their books?
For example, there are websites that will help you find and vet a prospective tenant. If you need help taking care of the legals, you can buy a kit that contains the necessary agreements, inspection reports and forms to communicate with your tenant along with instructions on to how to get it done.
Once the tenant is in place, it’s just a matter of good record keeping and open communication. Building a relationship with your tenant that is respectful and professional means that you can nip any potential issues in the bud which will lessen the likelihood of midnight emergencies or major and expensive repairs.
Whether you want to save yourself the cost of hiring a property manager all comes down to you, your situation and how much control you want to have.