As a landlord, a lot of trust is given to property management companies.  After all, they handle all the day-to-day operations of your rental property.

Sadly, property management companies fail to meet landlords’ expectations.  What started as delegation for passive income turns into micro-managing.  As well as loss of trust.

For landlords frustrated with their current property managers, hang in there!  Here is how to deal with a bad property management company.


Signs of a Bad Property Management Company

Poor Communication.  Landlords do not expect the property manager to be accessible 24/7.  For tenants, yes. A reasonable response time is greatly appreciated.

Property management is a low margin, high volume business.  Unfortunately, that means they work for a lot of landlords.  With that in mind, a response within 24 hours should be expected.  At minimum, a text or email response.  Multiple attempts to get a hold of property managers is a bad sign.

Unpleasant or Unprofessional Demeanor.  If a property manager is disrespectful to you, how are they to the tenants?  Don’t think that matters?  Consider who lives in your rental property.  They can make your life a living pain.

Limited Hours.  Renting never stops.  Tenants live there 24/7.  Your management company needs unlimited hours.  Damage can happen any moment.  Especially after-hours since a lot of tenants work banking hours. When tenants are unable to communicate emergencies, that is a risk.

Bad Tenants and Evictions.  When property management selected tenants that constantly pay late or get evicted, that falls on them.  It is tough to know if it was a one-time bad selection or a common theme.  Fool me once, shame on you. Fool me twice…

Unexplained or Unnecessary Maintenance Costs.  You hired a property manager to avoid the day-to-day operations.  Which means they coordinate all the maintenance and repairs.  With that comes the unknown for costs.

Solutions for bad property managers is sending their handyman out for every request.  Not trying to talk the tenants through the repairs themselves.  Or, not determining how minor an issue is.  Each trip cost you a minimum trip charge!  Understand all expenses related to maintenance coordination.

Some property management companies will not share the contractor’s invoice.  Instead, they create their own invoice with no backup.  That is shady.  This destroys trust!

Monthly Rent and Reports Falling Behind.  Each month your property manager owes you two things: rent and reports.  We all know what is the most important. Rent!

Hiring a property manager already puts you at a disadvantage.  All rent payments funnel through the management company.  Forcing you to be at their will when the rent checks are cut.  Often, 2-3 weeks AFTER rent was paid.

Although monthly reports are not as crucial, they are still important.  Falling behind is an indication of too much distractions or not professional.  Either way, an important indication whether they are good or bad.

How to deal with bad property managers

How to Deal with a Bad Property Management Company

Fire them!

Not quite.  Assess and then take action.

Is their bad performance incompetence?  Is it on purpose?  Or a little out of control, but they can right the ship.

Read Management Agreement.  This document is crucial.  Adhere to this document, this eliminates any excuses.  As well, document everything.

Send Notification.  A well written agreement should state how to notify breach of contracts.  Avoid informing by verbal or text.  It is important to send a typed-out Word Doc with the date.

Contact the Broker / Owner.  Inform the owner and broker of the management company.  They own the burden of bad business.  Request actions for corrections.

File Complaint with Local Real Estate Associations.  Licensed property management companies belong to an association.  Research their association they belong to and submit a complaint.  Their website should list the broker license number.

File a Complaint with BBB.  Not noticing any improvements?  Contact the local Better Business Bureau to file a complaint as well.

Bad Google Review.  It feels gratifying to threaten a bad review on Google.  Although, most property management companies ratings are low.  Due to majority of tenants providing the reviews.  This tactic is worth a try.

Read our full blog: How and Where to Report Bad Property Managers


How to Terminate a Property Management Company

Can’t deal with a bad property management company? At a certain point, move on.   Prepare the termination process.

Read Management Agreement, Again. Have we stated how important it is to read your agreement?  There will be a clause explaining how to terminate.  Expect a 60-day notice.

Calculate Remaining Fees.  What remaining fees?  They’re getting fired!  Most agreements require landlords to pay the full remainder of fees.  Even, if fired.  You read that correct.  They will earn 100% of the potential fees.

After calculating, determine if it is worth terminating them or waiting until the agreement expires.  Patience might be cheaper.

Request Update on Accounts.  Before implying termination, confirm everything is up-to-date.  Ask for a complete update of Profit & Loss and Expense statements.  Confirm all fees owed to the management company.  This prevents them adding more expenses after the notice.

Send A Written Notice of Termination.  Once again, follow the Management Agreement!  There might be specific terms or dates required for the notification.  Email a copy to the property manager, broker and business owner.

Notify Tenants.  Promptly notify all tenants that management has changed.  It is important tenants stop sending rent to the management company.  Amend the lease by updating management contact.

Transfer of Funds / Deposits / Documents.  Research your state law.  By law management companies are required to transfer all documents within a set duration.  They must turnover all paperwork, funds and security deposits.  FCRA prevents property managers from sharing tenant background screening reports.


What to Do After You Fire Property Management

There are three solutions.  It is best to decide before firing the property management company.

Hire Another Property Manager.  Perhaps it was only a bad property management company.  Not ready to write off all property managers?  Check out NARPM for suggestions.  NARPM is a professional association.  They hold their managing members to a higher standard.  Although success is not guaranteed.

Self-Manage.  Consider taking over the management of your rental portfolio.  With landlord software available, self-managing has become more optimized.  Check out Burbz FREE software solution for more details.

Co-Manage.  Not quite ready or able to self-manage?  Consider Co-Management.  Incentive-based property management that is customer-centric.  Landlords have more control and transparency of their rental properties.  Utilizing local-independent contractor to assist.  Burbz Co-Management platform is perfect for reducing management expenses while hiring help.

Free landlord software