When Is It Time to Switch Property Management Companies?

Are you thinking about finding a new property management partner?

We know that making such a big change isn’t always easy. You’ve likely established a relationship with your current property managers, and whether there’s some catastrophe that has happened which makes you want to move on or there has simply been a slow descent into dissatisfaction, moving on can feel uncertain and risky. 

Maybe you’ve been making excuses or giving your property managers the benefit of the doubt.

We believe in action, however. If you’re not getting the service you expect or you find that your expenses are going up while your income is going down, something is probably wrong, and you’re entitled to an explanation. When that explanation does not come or your management partner becomes defensive and prone to making excuses, you’re right to think that you probably deserve better. 

There are a lot of good reasons to leave your current property manager, even if making such a big change feels like a challenge. Here are some of the ways you’ll know it’s time to switch property management companies. 

Quick Overview: Change property managers when: Communication is lacking. There’s no investment in property management technology. Risk management is minimal because the manager does not keep up with rental laws. Tenant screening and retention isn’t great. Rent is consistently late. Maintenance is not a priority.

Communication is Neither Responsive nor Transparent

Communication is an essential part of any business relationship. You cannot have a good relationship with your management company if they’re not communicating well. When you find that your property managers are not available and accessible to you, there’s a good chance they’re also not available to your tenants. That’s a problem, especially when something breaks or assistance is needed right away.

There’s really no excuse for sub-standard communication these days. Technology has made it easier than ever to stay in touch and share information. With the right property management technology it’s easy to keep information transparent and accurate. But, maybe your existing property manager isn’t investing in the best technology. That’s going to create its own problems. 

Make sure your property managers can facilitate good communication. You should have an owner’s portal and your tenants should have their own portals, so they can pay rent online and make maintenance requests. You should be able to text your management company a question and get a response that same day.

You need good communication and you need reliable technology. If your property manager is stuck in systems designed to lease and manage homes 20 years ago, it’s time to move on. 

Lack of Understanding Rental Laws in California 

Rental laws and tenant protections are stricter in California than any other part of the country. In our rental markets, you need a property manager who is an expert in: 

• Fair housing laws
• Screening requirements
• Security deposit limits and returns 
• Eviction laws
• Rent control measures locally and statewide
• Habitability standards

You need to know that your property management partner not only knows the laws, but stays up to date on the changes in these laws. You need compliance and protection from liability and risk. 

If your property manager isn’t keeping up with new legal requirements and pending legislation, you’re at risk for expensive legal mistakes.

Everything you do as a landlord is watched by the state. If your lease agreement is dated or important laws are being ignored, you could find yourself facing lawsuits and penalties.

Don’t put yourself or your property at risk by working with a management company that does not proactively stay up to date on all the local, state, and federal laws. If they’re not keeping up, find a management partner that can protect you.

Tenant Screening and Selection isn’t Reliable 

Unqualified tenants will harm your property and cost you money. Especially in California, where evictions are difficult. 

You cannot succeed as a rental property owner if you’re not able to keep your properties occupied with well-qualified renters. If your property manager is not doing a great job of screening tenants, rent is always late, or lease violations seem to happen more often than they should, there’s a chance you need better management. 

All tenants are risky, even well-screened and highly qualified renters. But, with the right property management partner, most of your tenant risk is mitigated with: 

• Sound screening practices
• Experience in lease enforcement
• Good tenant relationships
• Consistent processes and systems

You want to make sure your property manager is protecting you against lost rent, property damage, difficult tenants, and complaints and disputes.

You’re looking for good tenants who are well-screened and feel comfortable working with your property manager. If your management company is struggling to place and retain great tenants, it’s time to look for another property management partner. Look for a property management company with impressive retention rates.

Collecting Rent and Generating Financial Reports

Rent payments have to be consistent and timely when you’re maintaining profitability. In fact, rent coming in on time should be something you don’t have to think about at all. You’re not the one collecting it – your property manager is. 

If rent is late, inconsistent, or not coming in at all, it’s essential that you have a conversation with your property manager to find out why. If you cannot get a reasonable explanation and a commitment to doing better, you absolutely need to switch management companies.  

There should be a consistent rent collection policy in place, and it should be enforced. This is the very least your property manager should be doing.

You also want to receive detailed financial reports and accounting statements every month. A good management company will provide access to those records on your owner portal 24 hours a day and 7 days a week. You should be able to see how your property is performing in real time, and you should expect an accounting every month, when rent comes in.

If you don’t understand what you’re reading or financial reports are unclear and lacking detail, you need to find a new property manager with better accounting practices. You’re not only trusting a management company with your property – you’re trusting them with your money.

Don’t settle for hidden or unexplained fees. Money issues should make you very nervous as a rental property owner. 

Poor Maintenance of Your Investments

Did you know that one of the main reasons that tenants leave a rental property is poor attention to maintenance needs?

This is also an excellent reason for you to leave your property manager. 

Maintenance has become more expensive over the past few years. There’s not a lot your property manager can do about the cost of labor or materials, but they should be implementing programs to keep your costs to a minimum. Emergencies will be rare when you have a good routine and preventative maintenance processes in place.  

When it comes to maintenance, these are the things you don’t want to see at your rental property: 

• Deferred and unreported repairs.
• Inattention to preventative maintenance. 
• No real system for tenants to report maintenance needs. 
• Vendors who are unlicensed, uninsured, and expensive.
• Unnecessary repairs.
• Unexpected maintenance invoices or unapproved repairs.

Your management company should understand the importance of routine and preventative maintenance, otherwise you’ll find yourself spending more than you have to on your property’s upkeep.

Don’t continue working with a property manager who allows deferred and unreported maintenance. Don’t work with a property manager who cannot explain mystery maintenance charges that make no sense. Switch to a company with solid maintenance procedures in place.

You’re Not Able to Leverage Resources and Technology 

What kind of vendor relationships does your property manager have in place? 

Good vendors will keep your costs down, and you need a property manager who can negotiate discounted rates that reflect the volume of work that’s provided. When those savings are passed on to you, it’s clear you’ve got a good management partner on your side. If costs simply keep going up without any explanation or mitigation, you should start looking elsewhere. 

You cannot effectively maintain your property if your management company is not available and responsive to emergencies 24 hours a day. 

This is one example of why working with a property manager is beneficial: you should be able to leverage their relationships and resources. If you don’t have access to outstanding maintenance vendors, good insurance agents, and attorneys and brokers, what is the benefit of this relationship? 

There’s also technology. Property management technology can make a huge difference in what you earn and how your property is managed. But it’s also expensive. Instead of investing in high-quality, pricey tech yourself, you should be able to lean on the systems your management partner already has in place.

If they don’t have those systems, you’re at a disadvantage.

Changing property management companies can seem like a huge undertaking. But, you want to protect yourself and your investment property. Be willing to make a move, and start enjoying a more successful investment experience. If you’d like some help taking the first step, we can work with you. Contact us at Key Realty Center.