The Real Estate Investing Authority®

Will The Real Property Manager Please Stand Up!

The Hidden Costs of Unprofessional Property Managers & What To Ask Before Hiring A Property Management Company. 


It’s very easy to dub yourself as a property manager. In some states, you can just flat out do it with no license or certifications. Crazy, right? Well no matter if your licensed or unlicensed there are 3 essential pillars that you must have in place to ensure that you are providing the most value to your owners + tenants, and putting your self in the best position to be successful. If you miss out on one or more of these pillars it’s like driving a car down the road missing a tire or two! Not good! Let’s jump in to discuss these facets in detail, and how they effect the big picture.


  1. Are You Collecting Rent?


It’s silly that we even have to bring this one up, but we mine as well get it out of the way now! Recently, our Nexus Property Management Pawtucket Office came across a situation where an owner hired us because his former “property manager” was not doing a good job with rent collection. We asked the client to elaborate to learn more and unconvered that the former manager had setup a venmo transfer service for the tenants to pay the owner directly. The owner was receiving payments electronically (directly) from the tenants. The problem was the payments were unlabeled, not tracked, and didn’t have an official ledger to correspond with. So, the property owner wasn’t sure what rent went where, if any late fees were added, or what amount to write in on the eviction notices for delinquent tenants. Total nightmare!


The first, and most important, order of business for all parties involved (property owner, tenant, and property manager) is the money. Without it everyone’s life is effected. For the owner, they pay their expenses + count on profits for their other ventures. For the tenant, they pay to have a roof over their head. For the property manager, they collect their management fees, pay maintenance bills,  and tenant placement costs as well. Everyone is getting in on the action, and for good reason. If this process is compromised in any way it’s more than just one person at risk. It is imperative that your property manager has a digital, efficient system setup that provides transparency and liquidity at a moment’s notice.




  1. Do You Provide IN-HOUSE Maintenance?


To the uneducated consumer they have no idea or care about how maintenance is actually getting accomplished. But, to the savvy client they ask the 2nd most important question:


“Is your maintenance work subcontracted or done in house?”


What this means is that when there is a maintenance request it’s either dished off to a vendor in the area, or it’s done by an actual employee of the property management company. When work is subbed out to a vendor the price goes up and the quality goes down. Face it, a vendor doesn’t care about the property the same way you or your property manager would. Their entire operation is based on getting calls from anyone and everyone, and typically moving forward with the highest paying jobs first. They are in business to make money, not to make you money. This is a tough pill to swallow, but it’s the truth.

When your property manager’s employees are the ones doing the work the tables are changed dramatically. The employee is concerned about having their job intact by performing quality work in good time. The property manager is concerned about keeping their client happy, as well as keeping tenants happy so they pay on time. Once again, similar to the money, everyone has a different vested interest in the situation. Each person’s motivation is healthy and sustainable. It is the polar opposite compared to the subcontracted vendor. On top of this, the property manager should also be offering lower rates, transparency, and accountability that the subcontracted vendor is likely not going to offer.


So, bottom line here is that the property manager should be offering a majority of their maintenance services to you with their employees. There are some times however to where you must call a network vendor because the job requires a specialist or is labor intensive. In this situation it’s OK, just make sure you get at least 3 bids to determine what the best price + value for you will be!


  1. How Are The Apartments Rented?


You will find a great deal of similarities in this topic as you saw in points 1 and 2. Similar to maintenance, some property managers are subcontracting their leasing activities as well. This means they will pay a real estate agent a flat fee to rent it out. The real estate agent will only be paid one he/she gets a tenant to pay the move in costs (varies state to state). The problem with this is that the agent is not concerned about the longevity and qualifications of the tenant as they have no vested interested with the property owner, tenant, or property manager moving forward. They are likely to present the first warm body in hopes of getting their commission as soon as possible.




When a property manager offers in house leasing they are once again likely to offer more competitive pricing, warranties, and transparency in their process. This is what you should be absolutely craving as a property owner. Tenants are the lifeblood to your success or failure, so it’s essential to ensure the leasing process is executed to the best of its ability. For example, Nexus offers a leasing fee of ½ month’s rent; or $450, whichever of the two is greater. In addition, we offer (2) separate warranties on the tenants we place. The first is LIFETIME eviction protection. This means that should a tenant we place have to be evicted at anytime during the tenancy (even 10 or 20 years down the road) we will place the next tenant for free. The 2nd warranty is our 90 day tenancy protection. This means that should a tenant move in and out within 90 days (for any reason) we will place the next tenant for free as well. Our warranties protect property owners in the short and long term. What’s better than that? You also save money on the leasing fee compared to hiring a real estate agent. The choice should be clear.


Many people DO NOT hire a manager because they see that as an expense to their bottom line. The truth is that the right property manager should perform all tasks efficiently, thus reducing your expenses and managing all relationships properly. This means happy tenants, cash flow, and the ability for the property owner to spend more time on activities he/she wants to; like buying another investment property. Choose wisely when selecting a manager, and make them earn your business, don’t just give it away!



Gregory Rice is the Vice President of franchise sales for Nexus Property Management®.  

Nexus Property Management® is a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.


Your Property, MANAGED®

The Real Estate Investing Authority®

Connecting You To Better Living®


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