For large multi-tenanted properties to be well managed it requires three levels of oversight.  As the saying goes, “A chain is only as strong as its weakest link” is definitely true for property management.  If any one of these three is done poorly the property’s performance will suffer accordingly.

3 levels of property oversight

The three levels of property oversight are: 1) the on-site manager; 2) the off-site property management company; and 3) the owner.  Smaller properties with less tenants do not need an on-site manager.  But apartments with 20+ units and large retail, office and sometimes industrial properties may need on-sight management.  For these properties, on-site managers will maximize a property’s performance.  So when is it appropriate to fire the on-site manager?

Pay on-site property managers well

Before I answer that question, let me begin by stating once again that on-site managers are generally overworked and underpaid.  Often times, they don’t get the credit they deserve for a well maintained property.  If you have an on-site property manager that is performing their job well, pay them accordingly.  My management philosophy is to pay them 120% of what the going rate is for their position.  You never want to have a good on-site manger quit because they can make a few more dollars working elsewhere.  Not paying them well is truly “penny-wise, pound-foolish.”

8 reasons to fire your on-site property manager

That said, there are eight reasons when you should fire your on-site property manager.  They should be fired when they are:

  1. Consistently not maintaining the property’s appearance.

    A property’s appearance is the first impression a prospective renter has of your rental property.  Is it inviting, or does it leave a poor impression?  The property needs to look clean and neat.  A good on-site manager when walking the property should be in the habit of always be picking up trash that is lying around.

  2. Not following the rental policies to the letter.

    Rent is due on the first and late on the fifth day of the month. No exceptions.  Those who don’t pay on time are always assessed a late fee regardless of reason.  If you don’t consistently charge a late fee you remove the incentive of paying their rent on time.

  3. Not keeping out of control tenants on a “short leash.”

    Every property I’ve ever owned or managed has had at least one problem tenant.  These tenants act as if the rules don’t apply to them.  The on-site manager needs to let these problem tenants know that that is not the case.  If you let problem tenants run roughshod over the property, the good tenants will eventually move out.

  4. Consistently not getting recently vacated units market ready for the next tenant.

    In a tight rental market, a unit that’s sitting vacant because the unit is not ready to show is costing the owner a lot of money in lost rent.

  5. Ignoring maintenance repair requests.

    A colleague of mine once had an on-site manager that he reluctantly fired only to discover she had a drawer full of maintenance requests that she let slide.  Do you want happy tenants?  Make sure maintenance repair requests are completed in a timely fashion.

  6. Consistently poor tenant selection.

    There is more to tenant selection than running background checks, calling previous landlords, etc.  There is also intuitively sizing up the prospective tenant.  I’m not suggesting that on-site manager discriminate based on race, sexual orientation, etc.  I’m not even hinting at that.  What I’m suggesting is that an in-person interview can many times give you insights into a person that can’t be objectively measured by the traditional tenant selection process.  Trust your gut instinct.

  7. Beginning to consider their tenants as their friends instead of their customers.

    You can imagine how this change in thinking can result in all sorts of bad things happening at the property.

  8. Suffering from burnout causing them to stop caring for the property.

    This the saddest reason for firing an on-site property manager.  You never want this to happen.  It’s incumbent on the off-site property manager and/or the owner to recognize the beginning stages of burnout so they can do whatever is necessary for this not to happen.

These are my eight reasons for firing an on-site property manager.  What have I missed?  What would you add to the list?

Doug Marshall is the award winning author of Mastering the Art of Commercial Real Estate Investing and the online course, The Great Game of Real Estate Investing.

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