How to Choose a Property Management Company (thread)

1/ Discount online reviews. PMs work for owners, but mostly get Yelped by angry tenants. We have 2.5 stars on Yelp, but, in 10 yrs, have only ever lost one PM client we wanted to keep.

2/ Let your PM make $. PM is super-competitive. There is always someone who charges less, but everyone has to eat. Consider how much your PM makes / unit / month from the mgmt fee. If it's too low, he will have to make it up elsewhere (margin on repairs, leasing, etc.)

3/ Align incentives. If, like most owners, you want reasonably happy tenants who stick around, make sure your PM makes most/all of his $$ from the monthly management fee.

4/ Similar properties. The skills involved in managing different asset types are very, very different. Do not hire a company that does mostly multifamily to manage your retail center.

5/ Location. Service levels are, to a very large extent, determined by the distance the PM & his maintenance and leasing teams need to drive to get to your property. If your prop doesn't have an onsite manager, then lean towards a local PM.

6/ Bigger isn't better. PM is a people business. The quality of the service you get is 95% dependent on the specific people who will service your building. Focus much less on the size of the company & much more on who, specifically, will be working on your property.

7/ Look for customer concentration. In gen., prof. investors hold PMs to higher standards than mom&pop owners do. So, look for PMs who manage for professional owners. The tell is the number of props managed / owner... the higher the number, the more professional the owners.

8/ Manage your own expectations. No one is going to do as good a job as you would, if you lived at the property and managed it. PMs make mistakes - they're humans. You want a PM who is honest w/ you... so don't roast him over honest mistakes (as long as they're not repeated!).

9/ Insist on a cancellation right. All our PM contracts are month-to-month. If we aren't keeping a customer happy, we don't want the contract to lock her in. Your PM co should do the same.