Property Management Red Flags
Douglas Realty’s Top 3 Red Flags to Look Out for When Searching for Property Management
It’s no secret being a landlord can sometimes be less than “ideal”. Those who rent out their homes surely have heard horror stories from other friends or family who do rentals, or have read about it on an investment blog or something of the sort. Even movies and TV shows often portray nightmare scenarios between tenant and landlords. It’s hard to think of a situation worse than a tenant destroying a home or not paying rent; but surely, there is. Imagine hiring a professional to ensure these awful things don’t happen, and they do.
Unfortunately, there’s ‘more than a handful’ of landlords that introduce themselves to us who are all to familiar with these property management horror stories. All to often we hear people introduce themselves and their stories with the impression it’s something we haven’t heard before, and they are simply desperate in trying to find someone that’s competent enough to help them get out of whatever situation they may be in. You literally can hear it in their voice!
We’d like to share some of the impossible property management red flags we’ve encountered over the years, and the red flags that these poor landlords should have picked up on. But hey, it’s not their fault. When you hire someone to help, you’d expect some level of service at minimum, but not downright negligence.
Red Flags to Look For
Property Management Red Flag 1- Internal Maintenance
Several years ago, there was an influx of landlords that began contacting us that were with a local competitor. For several weeks, we began noticing a trend with these potential clients that led us to believe there was something fishy happening.
One of the first calls was a landlord telling us he was told his A/C needed to be replaced for $4,500. Keep in mind, Florida gets extremely hot in the summer, and A/C replacement is typically needed around 12-15 years of use. Reluctantly, this landlord had wired in his money so his tenants could enjoy temps under 90 degrees in the property. When the property was brought to us, our initial inspection indicated that A/C unit was in fact not new, but an older unit. Granted it was still working, it was obvious the property owner was downright scammed out of sending in $4,500. Being 1200 miles away, it was an easy stunt to pull off. The trick was this company had explained they had an internal A/C company that could do the work cheaper than an outside vendor. Management companies that conduct internal maintenance have the ability to pull stunts like this way easier than a company that uses outside vendors. When an external company is doing the work at your property, there’s estimates that are written and proof that there actually is an issue. This way, you can be assured work is actually getting done, and done by a true licensed professional.
There were many other stories similar in magnitude that were apart of this scummy firm. But within a matter of months, we had close to 100 clients that we helped sort through their mess, and get things on track the best we could.
Property Management Red Flag 2- Excuses on Not Receiving Rent
A property management firm’s first and foremost goal is to receive and send your rent proceeds. That’s it. Everything else comes second, third, and so on. There’s really only one reason anyone takes the risk of renting out their property, and that of course is turn profit/return on your investment!
We see this situation way more often than we’d think possible, but it’s unfortunately all to common.
One of the worst cases of this was a company that was giving a landlord every excuse in the book as to why they hadn’t received their rent check…in over 8 months! This particular landlord was very, well, easily persuaded, and put their abundant trust into this “property manager”. Many times, these literal ‘one man show’ operations are where we see the most issues. This individual had simply been pocketing the $1,200 rent for 8 months before the landlord had reached out to us for help. We did our due diligence and contacted the tenants to send the a notice of eviction. Much to their surprise, they were able to prove rent payments to this individual.
Now, that’s a little more of an extreme case, but again, something we’ve seen!
Regardless, the rental market is very strong in South Florida and any property not receiving rent after months should raise a red flag.
Property Management Red Flag 3- No Inspections or Pictures
A more recent story was a couple from Arizona who own a property in Port Charlotte that contacted us about management. One of the first things we ask is how familiar a landlord is with the current condition of their property; meaning have they received any updated inspections or photos.
In this particular case, it had been three years since they had seen the inside, and they were on their second set of tenants. They informed us they had a management company hired to take care of things, and just thought it was normal to not have inspections and that they “handled everything”.
Unfortunately, we didn’t have to explain why that’s not the case. Upon our first inspection once the tenants vacated, we walked into a terrible scene. Everything from the appliances, walls, flooring…it all needed major work…things that could have been avoided with a simple inspection plan.
It’s imperative landlords seek a company that offers inspections on their properties and takes a complete set of photos along with filling out a report for documentation of wear and tear, and any damage the tenants have caused. It also gives us indication if we should renew the tenants or not, depending on how they are treating the property.
Best Way to Research a Company
In a world of fake online profiles, bogus reviews, paid ads, etc…the best way to pick a company is to simply interview them. Ask them about these red flags, and you’ll have a much clearer understanding of their competence. After all, it’s no light decision on who you pick to take care of your property!
The folks at Douglas Realty are always here to listen to your stories, and offer actual solutions to your current issues. We’re confident it’s something heard before, and if not, we’re even more confident we can resolve it!
Visit Here to see exactly how we conduct our property management services to avoid red flags like these!