Property management is one of the most important aspects of any rental business. Unfortunately, hiring a bad property manager can significantly affect your bottom line. That’s why recognizing a bad property manager from the start can help you avoid lost rental income and potential legal issues. In the video below, we’ll review when to fire your property manager and some major signs to look out for.
Should You Fire Your Property Manager?
Hiring the right manager is vital, and we’ll show you how to spot a bad one early to protect your income and legal standing. If you’re thinking of parting ways with your current manager, this video has the insights you need!
Key Moments in the Video
- 00:32 – Questions to Ask Yourself
- 01:06 – 8 Signs of a Bad Property Manager
- 05:08 – How to End a Property Management Agreement
Is It Time to Fire Your Property Manager?
Deciding whether to terminate your current property manager is a critical decision that requires careful consideration. If you’re unhappy with the results of the work that they’re doing, it may be time to fire your property manager. After all, you hire them to do a certain job, and if they’re not delivering, you’re losing out on potential income.
So, if you’re trying to decide whether to fire your property manager, you may ask yourself some of the following questions.
- Is the property not adequately maintained, with routine inspections and necessary repairs neglected?
- Are you getting timely responses from your property managers?
- Do you suspect any unethical or illegal practices being engaged in by your property manager?
- Are there ongoing tenant issues, like consistently missed payments or property damage?
If you find yourself answering “yes” to these questions, you may want to start looking for a new management company to work with. Luckily, our skilled property managers in Washington DC can help your rental business succeed.
However, stick around while we go over some of the top signs of a bad property manager.
8 Signs of a Bad Property Manager
Skilled property managers should effectively handle responsibilities ranging from tenant selection to property maintenance. After all, working with bad property managers can take a huge toll on your rental business. So, when signs of incompetence emerge, it’s crucial to recognize them early on. Here are some of the top signs that you have a bad property manager.
- Frequent Contract Violations
- Poor Communication
- Lack of Property Maintenance
- Poor Cost-to-Value Ratio
- High Vacancy Rates
- Inadequate Tenant Screening
- Lack of Knowledge and Resources
- Ethical or Legal Concerns
Frequent Contract Violations
A property manager who consistently violates the terms of the management agreement is a clear sign of incompetence. For instance, they may fail to adhere to specific responsibilities, neglect agreed-upon maintenance schedules, or disregard financial arrangements. These breaches demonstrate a lack of professionalism and may result in financial losses and legal complications for property owners.
Poor Communication
Effective communication is crucial to successful property management. That said, a property manager who has poor communication skills can cause significant frustration and mismanagement. For instance, if they fail to respond to messages promptly or consistently keep property owners in the dark about important matters, it can cause serious issues. This lack of transparency can lead to misunderstandings, strained relationships, and potentially decreased property value.
Lack of Property Maintenance
Neglecting property maintenance is a clear sign of poor property management. After all, routine inspections and timely repairs are essential for preserving the value and safety of a property. So, having a property manager who consistently overlooks maintenance requests or fails to conduct necessary inspections jeopardizes the property’s condition and the owner’s investment.
Poor Cost-to-Value Ratio
The ultimate goal for any rental owner is to make a profit. After all, a steady source of income is why many jump into this sector of investing. That said, most property management companies charge a monthly fee of around 8% to 12% of the monthly rent collected. While it can seem like a lot, the expense is generally worth it if the services provided match the overall cost.
High Vacancy Rates
Rental properties that sit vacant don’t make any money for rental owners. As such, having high vacancy rates is not in their best interest. A good property manager’s job is to quickly complete turnovers and market properties aggressively to quickly find new but qualified tenants. However, failure to do so can result in significant financial losses for property owners due to lost rental income.
Inadequate Tenant Screening
Placing unqualified or problematic tenants without conducting thorough background checks is a huge red flag. A property manager’s failure to adequately screen tenants can lead to issues like late rent payments, property damage, or even legal disputes. Ultimately, this lack of due diligence jeopardizes both the financial stability and the reputation of a rental property.
Lack of Knowledge and Resources
Before working with a property management company, it’s crucial to thoroughly research what services they offer, their licenses and certifications, and previous reviews. After all, a good company will be well-established and knowledgeable about the local market, local laws, and requirements for property owners. If you end up with a property management company that lacks the knowledge and resources to help your business succeed, it may be time to move on.
Ethical or Legal Concerns
Engaging in unethical or illegal practices severely breaches trust and professionalism. Property managers who discriminate against tenants, ignore legal responsibilities or engage in other questionable behaviors not only put themselves at risk but also expose property owners to potential legal consequences. This is a clear sign that it’s time to seek a new property manager who upholds ethical and legal standards.
How to End a Property Management Agreement
So, you decide that you’re going to fire your property manager–how do you end your agreement? While ending your contract may be the best choice for you and your bottom line, that doesn’t mean it’s the easiest. After all, it’s a legally binding contract, which means canceling it may lead to some penalties.
However, staying with an inadequate company can affect your bottom line, affecting your daily profits. So, if it’s time to cancel your property management contract, here are some of the steps to take.
- Read Through Your Contract
- Follow the Required Notice Rules
- Prepare for Penalties or Possible Fees
Read Through Your Contract
Start by thoroughly reviewing your property management agreement. You’ll want to pay close attention to any clauses related to termination, including notice periods and conditions for ending the agreement. Understanding the terms of your agreement can help ensure a smoother transition. Some companies may have an early termination clause allowing property owners to leave the contract under certain conditions.
Follow the Required Notice Rules
If you plan on leaving your contract, it’s crucial to adhere strictly to the notice rules. Most agreements specify a notice period, typically 30 to 90 days, during which you must inform the property management company of your intention to terminate the contract. This ensures that both parties have adequate time to prepare for the transition. Once you’ve given the proper notice, prepare to collect all the necessary records and transfer documents and funds to your new property management company.
Prepare for Penalties or Possible Fees
Remember that ending a property management agreement prematurely may result in penalties or fees, as stipulated in the contract. These can vary widely depending on the terms of your specific agreement. That said, it’s important to factor in these potential costs when deciding.
Choose the Right Management Company Today
If you’re dealing with poor management and feel it’s time to fire your property manager, you’ll want to have a backup plan. Depending on how many properties you have, it may be challenging to manage them all yourself. So, you’ll want another trustworthy property management company lined up to take over duties.
Looking for a reliable company to work with? Look no further than Bay Property Management Group. We offer comprehensive rental management throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC. So, whether you need help finding tenants, collecting rent, or performing maintenance, we’ve got it covered. Contact BMG today to learn more about how we can help your rental business succeed.
