When you own various properties and have a property management firm in charge of the day-to-day operations, you think all is well. However, if you have a property manager working for you who is less than stellar, the results may be anything but great. In many cases, a firm that is unmotivated or incompetent in key areas can result in a revolving door regarding tenants, poor maintenance of the building, problems with rent collection, and much more. However, even with these and other problems, many property owners are hesitant about making a change in property managers. If you find yourself wanting to make a change but are balking at the idea of doing so, here is everything you need to know about how to switch property managers.
Exploring New Companies
Once you have made the decision to switch property management, your first step should be to explore new companies. Since you likely know numerous people in the real estate business, start by asking them for advice. In addition, take a look around at other properties that seem to be well-maintained, and find out what property management firms are in charge. Once you have at least two options, get to work setting up an appointment with them.
Scrutinize Your Current Agreement
When thinking about going with a new property management company, always take some time to carefully scrutinize your current agreement. By doing so, you might find some hidden gems of which you had forgotten. For example, if you are extremely unhappy with your current company, your agreement may have terms that allow for immediate termination. Along with this, check to see if you need to send written notice to the company informing them of your decision. In many cases, these agreements are set up to automatically renew. If this happens, you may find yourself stuck with your current company for another year.
Don’t Get Complacent
In many of these situations, property owners convince themselves that the decision to switch property managers is too complex and time-consuming, so they simply keep the status quo. However, this is a serious mistake. Remember, properties that are poorly managed are not only not as profitable, but also tend to get a bad reputation within the community. In fact, when it comes to making a transition to a new property management firm, the process usually only takes two or three weeks. As an example, when we take over a new property, we visit the current property manager to pick up keys, contracts, and inventory. Once this is done, we make it a point to hand-deliver notices to all tenants informing them of the upcoming change. With a process as simple as this, there is no reason to get complacent and convince yourself the status quo is what you want and need.
The Revolving Door
If you have been involved in owning rental property for any length of time, you know all too well about the revolving door regarding tenants. In a building that is poorly-managed, tenants come and go in the blink of an eye, setting up a scenario of constant change and uncertainty at your property. If this is happening at your property, consider it to be a severe red-flag issue that needs to be addressed as soon as possible. In most circumstances, tenants leave quickly due to poor building maintenance, disputes with uncooperative property managers, or perhaps even fearing for their safety if the property has become severely mismanaged. Whatever the case may be, the best way to end the revolving door of tenants is to switch property management as quickly as possible.
Properly Vet a New Company
During your search process for a new property management firm, always make sure you have a solid vetting program in place. To do so, make a list of questions you want to ask a property management company during the interview. For example, ask how often the firm will actually be on-site at the property, and how they handle emergencies. Also, find out if they have experience managing properties similar to yours, and what their track record is regarding maintenance and repairs. Finally, ask about how they fill vacancies, their record keeping and accounting systems, and their knowledge of local and state laws that would pertain to your property. By knowing what questions you want to ask before the interview and not being afraid to ask tough questions if necessary, you will likely find a firm that gets your full confidence and trust.
Remember it’s Business
When owning properties and working with a property management firm, one of the biggest mistakes property owners make is forgetting that their investments are indeed a business. Thus, even though the property management firm they are currently using is doing a poor job, they may keep them around simply because they like the people. While this may be a noble cause, it is not one that will keep your properties profitable in the long run. Thus, if you know in your head and heart a change is needed, find the courage to follow through with your convictions. By having a thoughtful conversation with those currently in charge of your properties, chances are the transition will be smooth and done with no hard feelings on either side.
Always Follow Up
When you switch property managers, always make an effort to follow up on a regular basis to see how things are progressing. For best results, make sure you check in with your new property managers at least once every three months, and sooner if you feel it is needed. Also, while you can sometimes let them know of your upcoming visit, also have a few unannounced visits scheduled in along the way. By doing so, you will get a true feel for what goes on day-to-day at your properties. If there are any issues you find concerning, don’t look the other way. Instead, speak with your manager while you are there, which will enable you to get any potential problems cleared up right away.
Due to the fact that a poorly-run rental properties can lead to less profitability and many other problems, always be willing to look elsewhere for your property management needs. With our many years of experience managing various types of properties, you can be sure we can handle anything and everything that comes our way. Whether you are having problems with tenants coming and going, maintenance issues, or problems regarding rent collection, we can help rectify these and other issues with your properties. If you want peace of mind as well as profitable properties, contact us today to learn how to switch property management. By doing so, you’ll be taking the first step to having a good night’s sleep, knowing your property is in good hands.
