If you own a rental property, you may consider hiring a property manager to assist you. However, more people in this field are realizing… some property managers are not good at their job. There are some who do great work, but there are many disadvantages to hiring a property manager and some are just simply scammers. Here are some reasons why you should think twice before hiring one.
Their Contractor Selection Isn’t the Best
Property managers tend to hire contractors they are partnered with. This can lead to them dealing with bad contractors who aren’t that good at their job. For example, they may end up hiring their friends or associates who give them a discount, and sometimes, those contractors may not even be licensed or insured.
Many of Them Aren’t Nice to the Tenants or Don’t Care
There’s been a growing disconnect between tenants and landlords, and one of the reasons for that is a poor property manager. You know the one. They act like the property is theirs and will be snarky towards a tenant should the house be messy or something else is out of line. This is going to make the relationship the tenant has with you as owner worse. A good tenant landlord relationship is vital to the success of your rental property.
On the other hand, the opposite can happen as well. The manager may not care who they
allow into your home as long as they put someone in there so they can earn a commission. So the property manager may rent it to a bad tenant who will destroy your property. It’s important to have a critical, but fair person involved with the tenants.
Then, you have some who don’t even move in anyone, and keep the property neglected.
You Lose Money
If the property management company you hire is small, there’s always a chance of them going bankrupt and taking your money as a way to recover finances. They will also not be cost efficient when doing maintenance work, because that involves more of their time. And some bad property managers will actually skim money off the maintenance expenses!! If you want to save money, going with the property manager is not good.
An Alternative to a Property Manager
If you end up not hiring a property manager, here’s what you should do.
Reward Your Tenant for Good Work
Set up an agreement with your tenant. A residing or future tenant would get a discount, be it lowered rent cost or something else, as a reward for keeping the property maintained. You could also waive other fees. Having rewards will not only save you some money by not needing a manager, but it can keep the relationship between you and the tenant going strong.
A rewards system not only keeps your relationship strong, but it also gives a tenant more incentive to stay there longer. With a property manager, you may have to stack up the fees, which will bleed over to the tenant. With increased rent and a manager they don’t like, they may just end up moving.
The manager fee is about 10 percent of the total rent cost, so that could be the compensation you give your tenant.
Giving your tenant an obligation to keep the place running as well as possible can also scare away the bad tenants. In addition, a tenant can be easier to communicate with at times. While no tenant is going to be perfect, you lower your chances of finding a tenant who is going to make your hair fall out.
With that said, property managers are needed for bigger units for the sake of managing many tenants. For a single family unit or something small, you probably don’t need a manager, and this alternative could work better….but for a bigger one, you may need to get one. If that’s the case, do your research on your property manager hires. Websites such as con-tractors.com can help by providing you with bad contract list of property managers.