The decision to hire a property manager is never made lightly. Choosing a property manager, similarly, involves a great deal of thought and consideration. However, even if you were initially confident in your hiring choice, you may find that with time, you’re just not sure you’ve signed on the best property manager for your needs. It can be hard to know when your working relationship has run its course. Here’s how you can tell if it’s time to find a new property manager.
Some Common Red Flags/Issues
How can you be sure that what you’re feeling isn’t just “cold feet” about working with a property manager? Here are a few red flags that you should keep an eye out for if you find yourself considering jumping ship and finding a new property manager.
#1: Lack of Communication
One of the most important skills a property manager should possess is the ability to communicate effectively. If your property manager is often unreachable, lax with proactive updates, and takes a long time to answer your questions, this is a red flag. If this is how they communicate with you, their client, it’s possible that it’s reflective of their communication with your residents, which could impact your ability to keep them.
#2: High Tenant Turnover and Vacancy Rate
If a property management company is delivering, you should experience relatively low turnover and short vacancy periods. Your property manager should be able to market your properties effectively and know how to find reliable and responsible residents. If you find that your eviction rate is higher than average, it’s possible that your property manager is missing the mark on screening tenants. If tenants are breaking their leases early or failing to resign their lease, however, it may be that your property manager isn't providing them with good service. If you find you have a high turnover rate, it may be worth asking your property managers what your tenants’ experience is like
#3: Limited Hours
One of the wonderful benefits of hiring a property manager is that they’ll be on call for your tenants, should they have an emergency or need maintenance requests fulfilled. Your tenants rely on your property manager for these services, and likewise so do you. If your property manager has limited availability, service requests and response times are likely to be delayed.
#4: Poor Follow-Through
Your property manager should be able to provide you with monthly and annual reports of your profits, and fulfill maintenance requests. All of these tasks require attention to detail and follow-through. If you’ve noticed that it takes several requests and follow-ups before your property manager actually completes a task, you have a problem. More worrying, if your property manager has poor follow-through, it’s unlikely they’re staying up to date on maintenance and compliance checks.
#5: Limited Services
While your initial contract will have outlined what services your property manager is obligated to fulfill, over time you may find that your property manager doesn’t offer quite enough services to add value to your business. While you may not find you need your property manager to “do it all,” they should have the capability to offer all management-related services. These should include, at minimum, leasing your property, advertising to and screening future clients, cleaning your property in between tenants, and managing maintenance requests. As of 2019, 73% of property managers handled property inspections and cleaning. If your property manager falls in the 27% category of property managers who don’t offer these services, for example, it may be time to find someone who does. A great place to start would be to ask your property manager to survey your renters to get a sense of what they may need.
Repairing the Relationship
If you’re unhappy with the quality of service your current property manager is providing, but aren’t sure if you’re quite ready to pull the plug, there are steps you can take to try and salvage the relationship.
Voicing Concerns
It’s far too easy to tamp down your feelings of concern in an effort to avoid conflict. However, conflict resolution experts recommend being as direct as possible. Negative emotions understandably cause discomfort. But avoiding addressing your concerns with your property manager will only serve to make things worse. Instead, set a time to speak directly with your property manager and lay out the issues you have with their current performance.
Reviewing Responsibilities and Expectations
If your property manager is amenable to making changes, bring their attention to your original contract. A good property management contract should highlight exactly what services the property manager is expected to provide. If you believe your property manager hasn’t been fulfilling some of their duties, you can use your contract as a reference to back up your case. In this process, you may also find that you are failing to meet the expectations of your property manager. Reviewing the contract is the best way to reset your working relationship and lay the groundwork for moving forward.
Moving Forward
If you believe your current property manager can turn things around, then you can move forward with their services. Be sure to keep an eye out for any more red flags moving forward. It may be worth setting up monthly meetings while you’re working through this period of transition, just to make sure both your needs and their expectations are met.
Getting a New Property Manager
If you’ve decided that repairing the working relationship with your property manager isn’t possible, then you’ll need to take steps to find their replacement.
Qualities to Look For in a New Manager
First, consider what qualities you’d like your new property manager to have. An effective property manager will have excellent communication skills, a reliable portfolio of vendors to draw from, and will ideally specialize in your particular kind of property. They’ll also have the kind of marketing services you’ll need to keep your rental property filled. They should also have a grasp on new technological trends in property management.
Buildium’s 2021 State of Property Management Report shows that 81.8% of property managers use property management software, 77.4% offer online payments, and 64.1% offer a client portal for property owners. When your property manager uses the latest software options, it will be easier for you to be kept up to date on all goings-on with your business. Your residents will benefit and so will you.
Check Your Contractual Language
Your property management contract will outline the circumstances under which you’re allowed to terminate your working relationship with your property manager. It will also indicate whether you’ll need to pay a fee for early termination. In most cases, you’ll need to give between 30 and 90 days’ notice in order to end your contract.
Your contract should also include a list of duties that must be completed after your contract has been terminated, and the time period in which they must be done. For example, your contract may state that your property manager must provide you with copies of your tenants’ leases within a month of your contract’s termination. These are all details you should know before officially terminating your contract.
Find a New Management Company
Finding a new management company doesn’t need to be stressful. You can seek out referrals from your real estate agent or from friends or coworkers. Alternatively, you can use an online, searchable database to find reliable and well-established rental property owners in your area.
Create a list of property management companies that are of interest and set up interviews to learn more about what services they offer and how they like to conduct business. After you’ve vetted the companies on your list, you should be able to find a property manager who’s a good fit.
Notify your Management Company
Once you’ve found a new management company, you’ll need to officially notify your current property manager that you’re terminating your contract. Check your contract for specifics on how the termination needs to be submitted, but you’ll typically need to send a formal letter (and we recommend writing an email as well), informing them that you’re putting in your notice to end your contract.
In this letter, you should cite the ways in which they’ve violated the terms of your contract (if applicable), failed to fulfill their duties, or otherwise didn’t meet your needs as a client. While it’s important to be honest at this stage, try to stay objective and on reasonable terms. After all, they’ll still be managing your properties for at least 30 to 90 more days and you’ll want the transition between your existing manager to your new manager to go smoothly.
Notify Your Residents
Before your new management company takes over, you’ll need to notify your residents that they'll be a change in management. In most states, this is actually a legal obligation. Your state’s tenants’ rights laws should outline what your responsibilities in this arena are. Whether you are legally obligated to do this or not, however, it’s a good idea to connect your tenants with your new property manager as soon as they’ve taken over management of your property.
While it can be frustrating to have a property manager who doesn’t meet your needs, there are steps you can take to fix the relationship or find the right management company for you and your business. In other words, there is no reason you have to settle for less than the best from your property management company. With these tips, you’ll be able to find the right solution for your property management needs.