When these investors contact me wanting to sell, I often end up buying their properties—and more often than not, they take a loss.

Let’s break down the warning signs that your property manager may be doing more harm than good:

Warning Signs

1. Below-Market Rent Pricing
   If your stated rental price is priced lower than comparable properties in the area, your property manager might be trying to rent it quickly just to maintain a high occupancy rate. This looks good on paper when they pitch their services to new clients, but it leaves money on the table for you. Worst, if they have other vacant units near your property, they could be undermining the ability to get yours rented quickly. Someone calls inquiring about your property but instead they also suggest considering another property as well that has been sitting vacant longer than yours.
2. No Rent Increase
   When the lease is renewed for another year, the rent remains the same. The PM has made no effort to increase the rent because either you have not requested it or the PM has no process in place to do so.
3. Inflated Maintenance Bills
   If repair costs seem unusually high, it could be because your PM outsources the work and adds a 15–30% markup. This becomes another revenue stream for them. They may insist you use their maintenance team—often including it as part of the management agreement, citing they are better covered with insurance and bonding. But you can hire your own licensed and insured local contractors to save money. It may require more hands-on involvement, but it can save you thousands of dollars.
4. Unauthorized Repairs
   If repairs were made without your approval and the cost deducted from your payout, that’s a red flag. Most PMs keep $500 in escrow for emergency repairs and use that when necessary, but they should still notify you and request authorization regardless.
5. Late or Missing Rent Payments
   Most PMs collect rent in the first few days of the month and pay owners mid-month, allowing time for late payments. If you don’t receive payment, it could mean there’s an issue with the tenant that your PM hasn’t disclosed—or worse, the tenant may have moved out without the PM knowing. Property managers are often busy and may not physically check on the property. That’s why you need to stay engaged and follow up.

If you experience any of the above, treat them as red flags. It may be time to find a new property manager.

Finding a Good Property Manager (and What to Ask)

If you’re serious about protecting your investment, you need to vet your property manager properly. Here are some Key Performance Indicators (KPIs) and contract questions to ask when interviewing a potential property management company:

KPIs

• How many properties do you manage?

• How many other vacant rental properties are you currently marketing in the area of my property?

• Do you currently own your own rental properties as well? Are any near my property that are occupied or vacant?

• What’s the average rent per property? (Also, per ZIP code?)

• What’s the average security deposit per property?

• How many vacancies do you have on the first of each month?

• What is your monthly vacancy rate?

• What percentage of leases are completed in full?

• What percentage of leases are Section 8 vs. Private Pay tenants?

• What percentage of tenants renew their leases each year?

• What is your rent increase process prior to lease expiration?

• What’s the average length of tenant occupancy?

• What percent of properties have maintenance calls within 30, 60, or 90 days after move-in?

• How many days, on average, is a property vacant:

  • From purchase to first tenant?

  • From one tenant moving out to the next moving in?

• What’s the average repair cost after a tenant moves out?

• What percentage of billed rent is collected monthly?

• What percentage of collected rent goes toward annual maintenance?

• How much is spent on maintenance per property, per month?

Management Agreement Questions

• Is the lease between the tenant and you (the owner), or between the tenant and the property manager?

• Will I have access to an online owner portal for income reports and maintenance tracking?

• What day of the month will I receive payments? Will they be ACH bank deposits?

• Can I use my own contractors for maintenance?

• If I decide to sell during the contract, do I have to use your brokerage or can I hire my own agent?

• How do you handle evictions?

• What is the cost to terminate the management agreement?

You might not get a clear answer to every question, but asking them reveals a lot about how the company operates. The more transparent and communicative they are, the more confident you can be in their services.

Remember: Your property manager is your partner in protecting and growing your investment. Choose wisely.