We have heard so many landlord horror stories lately that we just could not wait for Halloween. If you want to avoid living through one, you'll want to choose your property manager wisely... the first time!
We regularly speak with unhappy landlords who signed on with incompetent property managers or wanted to be their own property manager and they now need Chesapeake Property Management's help with tenants and properties.
Often, the tenants have trashed the home, not paid the rent and the property manager is nowhere to be found. What is a landlord to do? It is so upsetting to us when we hear these stories and, lately, we are hearing them more and more. These landlords are usually out-of-state and are shocked to see photos of the current condition of their property.
And to make matters worse, their current property managers have no answers. They do not answer their phones, have never licensed the property (so the landlord cannot sue the tenant via the court system), have no walk-through procedures (you cannot hold a tenant's security deposit if you have no before and after photos) and, oh by the way, where is the security deposit anyway? Did the property manager ever put it in an escrow account?
What a mess! Let's take a closer look:
How To Protect Yourself From Landlord Horror Stories
Remember, property management is not a regulated industry. It's really important to be careful and do your homework before you hire your property manager! Here are a few helpful hints on how to choose your property manager wisely so that you don't have a landlord/tenant horror story later.
1. Property management requires a completely different skill set from real estate sales.
The work of a property manager is highly detailed and system-oriented.
In contrast, real estate is a sales position that requires people skills; the details and oversight in a real estate transaction are usually left to underwriters, loan officers and title officers.
Moral of the story: please don't hire a real estate agent to be your property manager. Yes, I know that many real estate sales agents "dabble" in property management. Do yourself a favor and hire a dedicated property management company. It really matters and hiring mistakes now will cost you dearly later.
2. Don't be fooled by property management companies that charge low monthly fees.
You want your property management company to be profitable so that they have a stable team, lots of experience and the ability to manage your property professionally and properly from day one. Please don't go for the cheapest, fly-by-night company you can find. As the saying goes, don't be "penny-wise and pound-foolish." Hire a true professional, who has been in business for years and has a stable, dedicated staff that can truly look out for your home. Money spent now will save you a lot of headaches later.
3. Read the fine print of your property management agreements!
What other charges will the property management company charge to you? Should you expect service fees? What about mark-ups on contractor invoices? What kind of licenses does the company have?
A property management company is going to make money somehow, they have to. If they charge a low "teaser" fee, they are going to mark up services and possibly "nickel and dime" you throughout the month making it hard for you to budget and have a consistent experience.
Know that Chesapeake Property Management doesn't do that. We charge one monthly fee and that is it. Is it more than other companies? Possibly. But at least you can budget for it, deduct it (see Rental Property Tax Deductions & Depreciation For First Time Landlords) and know that you are not being scammed. We are completely transparent and truly care about you, your home, and your experience with our company. Our reputation is all that we have, it is our legacy, and we are completely open and up front with our fees, no fine print or hidden fees with us.
4. Beware of signing away your rights as a property owner!
Please don't sign away your rights to your property management company via a limited power of attorney in your property management agreement! With technology today, it is so easy to send documents and updates back and forth between parties and there is no reason for you to not be involved.
When new landlords come to me and I see that they have signed a limited power of attorney with their prior management companies, I am scared for them. I know it is tempting to "check out" of your investment property and turn it over to someone else. I get it. You may have moved out-of-state, you are moving on to a new chapter of your life and just don't want to deal with this Baltimore area home. You want to "believe" that your property managers will handle everything just like you would.
Don't be fooled. It is your investment, your property, your credit scores and your reputation at stake. Stay involved and choose your property manager very wisely.
5. Choose a property manager who knows your area and your neighborhood!
Oh my goodness, property managers from out-of-state? No! Property managers who don't know your neighborhood and its rules, regulations and quirks? No! Do your due diligence and find a property management company that knows your area, is invested in your community and cares about your home, your reputation, your neighbors and the area at large.
7. Know your tenant!
And please... know your tenant. Did you review the tenant application and credit report? Did you ask questions about the tenant's rental history and reason for moving? Did you keep copies of all documents? Or did you rely strictly on your property manager's advice? Or, worse yet, if you signed away your rights, did you never review any documents at all?
Please don't check out until your property manager has earned your trust. As careful as we are, another set of eyes (yours) is helpful to make sure that we don't miss anything. Let's work as a team to make sure that your transaction runs as smoothly as possible.
Choose Your Property Management Company Wisely So You Avoid Landlord Horrors
When we receive these SOS calls, we do our best to help you close out your current transaction so that we can take over. However, not being a party to that transaction makes it difficult to get all of the answers for you and you are often left feeling frustrated, angry and stressed. We feel for you; we really do.
I must have spoken with 5 landlords in the past few days who are in this situation. So, please do yourself a favor and be so careful up front, before you turn over keys and sign any documents. I cannot stress this enough. Do your due diligence before you sign anything with a property management company, with a tenant, with a contractor, or with anyone.
We are here for you at Chesapeake Property Management. No surprises. Just honest, transparent assistance for landlords in the Baltimore Metro area.
Why are we in this business? Because when our Yaffe Real Estate clients asked us for property management referrals back in 1998, we could not find any that we felt comfortable recommending. We have high standards and none of them met our criteria. So we started our own company, hired an amazing team and continue to learn and grow to meet the demands and expectations of our amazing clients. You deserve the best representation possible; don't settle for anything less.