8 Things Investors Should Avoid When Using a Property Manager

These are the top 8 things that property owners should avoid doing while working with a property manager.

Hiring a property manager can be a great thing for you and your property. It frees up your time and allows you to have more energy for the things you enjoy. However, if you haven’t had one before and you are used to managing yourself, it can be a big adjustment. Putting your largest asset in the hands of someone else can be a bit nerve racking and lead to you micromanaging your manager.

The goal of the property manager is to make this process easy for you. In our experience, things tend to run smoothly when the managers understand the owner’s goal for the property and there is clear communication. Homeowners should hire property managers that look out for their best interest while also helping them achieve their long term goals for the property.

These are the top 8 things we recommend you avoid doing when working with a property manager to ensure the best possible outcome for you.

1. Communicating with the Tenants

You hired a property manager to be your buffer. This means that they handle any and all tenant communication. This is easier for the tenant so they don’t get confused about who they should be talking to. Things get messy when the tenant starts contacting you for some things and the property manager for others.

landlords talking with tenantsThis is also better for you because you shouldn’t have to worry about communicating with your tenant. It will add stress to your life by making you an accidental middle man for the tenant and the property manager.

Takes up space in your head, causes headaches for you. Property manager = out of sight out of mind. Once you know the tenant, it changes how you view things and make decisions (rent increases, etc.) Allows you to be more objective.

2. Involving Yourself in the Marketing and Tenant Selection

In a perfect world, you would not know who your tenant is. The property manager would select a qualified tenant and when the lease is up for renewal, recommend if you should or should not renew them.

Many owners feel the need to have a hand in picking their tenant because they want to control who is in their home. This is understandable. These people will be living in your home for at least a year and you want to make sure you feel comfortable with them.

However, the homeowner picking the tenant can quickly lead to fair housing violations. Property managers have taken courses in fair housing and understand what is allowed and what isn’t. Management companies usually (and should) have a strict, written rental criteria that they follow. This prevents any favoritism and ensures that they are selecting tenants in a non-biased manner.

3. Replacing Appliances with Lesser Quality Versions

Tenants rent their homes as they are at the time they move in. This means they expect that if something breaks, it will be replaced with something of similar quality. Trying to downgrade an appliance will leave a bad taste in the tenant’s mouth and increase the likelihood of the appliance needing additional maintenance or not having a very long lifespan, essentially costing you more money in the long run.

4. Not Adjusting the Rent When There's No Activity

We understand that it’s frustrating when your home isn’t renting for the price you wanted. This is especially difficult when you’ve been told what the value of the home is and what it should rent for.

Different seasons mean different attainable prices for your rental property. Summer usually has the most property activity because college students, young professionals, and families are moving.

If your home is sitting on the market with little to no activity for 1-2 weeks, the price is likely too high for the market or season and needs to be adjusted. While your home might rent for $3,000 in July, you may have to drop to $2,700 or lower in winter months.

While initially you might think that you’re losing money, pricing the home correctly saves you on vacancy costs. Long vacancies will cost you much more in the long run than lowering the asking rent by $50-$100.

5. Cleaning the Home Yourself

Preparing the home for the market requires a deep, thorough cleaning. One that is best left to professionals. They have the materials and tools required to make your home sparkling clean for potential tenants. It would likely take you much longer to do a similar job and even then, would probably not meet the standards of a professional cleaning.

A spotless home is highly appealing to tenants and shows that you care about their standard of living. It also encourages them to continue to take care of your home. If your home is extremely clean when they move in, they are more inclined to keep it that way. Presenting your home in a less desirable manner will likely make them think that you won’t be bothered if they are a little messy.

6. Renting the Property to Friends or Family While Under Management

This is one of the cardinal sins of property management. Renting to friends or family while under property management can present a lot of problems. If there are any disagreements between the manager and your friend, they will immediately run to you, dragging you into the situation that the manager was hired to handle.

Your friend likely won’t be able to leave you out of any communication, whether it is out of habit or wanting to keep you in the loop out of courtesy. If an appliance breaks, they will likely tell you what new appliance they want. All of these things can make it increasingly difficult for the property manager to do their job effectively and make it hard for you to remove yourself from the situation.

7. Move in Specials

Move in specials seem like a great way to attract a tenant off the bat. However, when tenants are searching for homes based on price, your home won’t show up for them if they have specific parameters set.

For example, let’s say you are renting the property for $2,000/month. In the description, you add that if they move in within a week, you’ll take $600 off their first month. If they are only searching for homes under $2,000, your home won’t appear in their searches. This means that you may be missing out on potential qualified tenants.

The better move is to lower your asking to $1,950. This will attract a wider pool of tenants and still offer the same amount of money.

8. Ordering Appliances or Other Materials Yourself

This adds an additional layer of complexity. If it’s the wrong type, doesn’t fit, shows up damaged, or doesn’t show up, you’ll be dealing with an even bigger problem that the property manager could have handled for you.

Property managers usually have experience with ordering parts and appliances through their preferred outlets. They know what they are looking for and what a reasonable price is. They know how to get you the best deal for the best quality item.

For more tips on hiring the best property manager for you and your property, check out our free guide!

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Hey guys, Adam Manley here from Good Life Property Management. Here today to bring you guys another great video. If you’re an investor who has been self-managing their portfolio and are considering hiring a property manager to do that for you, here are eight great things you should avoid when working with a property manager. So the first and probably my favorite is communicating with the tenant. So especially if you’ve been self-managing, this is going to be one that’s very hard to let go of. But basically this is the number one reason why you’re hiring a property manager is to be that buffer between you and the tenant. So once you start interacting and communicating with them, you create that kind of communication triangle where they tell you one thing and maybe tell us something different. So it just creates a huge mess. It also takes up headspace when you’re thinking about all these different tenant communications. So leave the tenant communication to us if you’re an investor who’s considering hiring a property manager. This is probably the number one no-no. The second one is involving yourself in the marketing or leasing process as well. And this is probably another thing that’s very difficult to let go of if you’ve been self-managing your portfolio for a long time. But the most important reason why you want to have a property manager handling this part is to make sure there is consistency in the way that applications are screened. You don’t want to be even unconsciously violating any fair housing laws, whether those are state, local, federal. So it’s very important for that reason also. And then to also tie back into number one, you just start to know the tenants again and then you get into that bad feedback loop or that bad communication triangle. So that’s number two. You don’t want to involve yourself in the marketing or leasing process. And the third reason to avoid when using a property manager is replacing appliances with different appliances than are existing inside of the property. So if you had a really nice stainless steel fridge that went out of service and was no longer working, and then you as the investor involved yourself in the appliance replacement process and then put the cheapest fridge that you can inside of the unit, it’s going to create a not a good feeling on the part of the tenant. They’re going to feel like you’ve cheaped out on them. It could also create issues down the road, maybe with additional repair expenses. So again, that’s something you want to leave to the managers. They’re going to make a great recommendation to you. That’s based on the cost of the appliance, what’s there inside of the property already, and how that’s going to affect the tenant. So this is something property managers do regularly and they’re very well trained to know the impact of something as simple as an appliance change has on a tenant. So that’s number three. All right, guys, the fourth thing you want to avoid when using a property manager is not adjusting the rent during the marketing period. So here at GoodLife, we’ve rented thousands of properties and our average days on market is about 14 days. So if you’re an investor and your property’s been on the market for a week and we haven’t received any applications yet, it’s clear that the market has probably rejected that price and we need to make some reductions in order to continue to generate interest on the property. So this is something you absolutely want to avoid. If the market has rejected your price, you need to adjust accordingly. The fifth thing that you should avoid when working with a property manager is cleaning the home yourself. As an investor, this is probably something you haven’t thought of before, but it is absolutely one of the most crucial things. There are professional cleaning companies out there that do this. And I know that you aren’t a professional cleaner. So leave it to the pros, get it done right, and have that peace of mind knowing that it was done by a professional. The sixth thing you should avoid is renting to friends or family during the management process. So as an investor, you may have had experience with this in the past, but there’s an old saying, don’t do business with friends or family. And I think that applies so strongly with property management. It’s just something you want to avoid like the plague. Do not put a friend or family member. It can create a sense of, you know, they potentially feel like they can maybe get one over on you or take advantage of certain situations. So it’s just something we strongly avoid. Do not rent the property to a friend or family member while under management. All right, guys, coming down the home stretch, the last two things to avoid when working with a property manager. Number seven is move-in specials. I love this one too. So a lot of times I’ll see online owners offering some type of incentive to potentially get the property rented, maybe, you know, $500 off first month’s rent or, you know, some kind of move-in incentive to create additional interest on the property. And this always cracks me up because what they really need to do is just reduce the price. It kind of ties in to number four as well. And it may seem like you’re making more money or doing this to, you know, make more money over the long term, but I can tell you from experience that this just simply does not work. You generally end up netting less over the course of the lease term. And often the move-in special isn’t really appealing from a tenants point of view. What’s more appealing is just a lower rent amount. So scrap the move-in special and just lower the rent. That’s number seven for you. And finally, number eight wrapping it up here are ordering appliances yourself or handling the delivery process yourself while you’re using a property manager. And again, as an investor, this may be something that’s very difficult to let go of because you want to maintain control of the whole process from ordering the appliance to making sure you got the measurements right, to the installation and making sure that goes smooth. And, you know, filing up with the tenant, of course, to make sure everything was installed correctly. And when you’re doing this yourself, you’re just adding an additional layer of complexity in this whole process. Your property manager can handle this for you under a set amount. If you give them, hey, I need a stove or oven for under a thousand bucks or, you know, whatever that amount is, they can make sure that it gets done, replacing the appliance for something that’s already similar to what the tenants, you know, already used to in there. And they’re just going to get it done with a lot less back and forth. So those are eight things that you should avoid as an investor when working with a property manager. Thank you.