Property manager changes: A natural part of the industry

If you have a real estate investment there is a fair chance that you manage your property through a property management company (normally through a real estate agency).  I have posted before on the decision to use a property manager versus self management, how you should choose a manager, the expectations you should set and how much you should pay.

You will eventually get to a point where all things are running smoothly and you really do not have a great deal to do at all.  This is the perfect place to be as your investment is running according to plan and not taking too much of your personal time. 

Invariably though, whether it be after 6 months, or 2 years, you will get a letter in the mail telling you that your property manager has changed.  This post will deal with the question of why and whether this is a big deal.

Why do property managers change so often

The first few times it happened I was honestly surprised how quickly my property manager was changing.  In the first 3 years of owning my property I had 3 different property managers.  1 got promoted to running the full property management team at the estate agency I was contracted with and the second took maternity leave.

I looked into it and it turns out that I was not alone.  Turnover is very high in the property management industry for several reasons including

• Property managers are often overworked. The fees associated with each property are relatively low, so to pay a decent wage and still provide profit for the company each property manager typically gets a lot of files to deal with
• Unreasonable tenants / owners.  The property manager is often the one caught in the crossfire between tenants and landlords.  This requires a certain type of personality and the pay is often not enough to compensate for being the punching bag for both sides
• The job is often seen as an 'interim' one: I read on a forum once that property management jobs are seen as a good way to 'get your feet wet' in the real estate market.  Your wage is not dependent on the number of sales you make but you learn to deal with people in the property market

The real answer is probably a combination of the above factors and others as well.  However the fact is that if you rent out your property through an agency then you are going to have some turnover in your property manager over the years.

Should I worry if my property manager changes?

The change of a property manager is particularly disconcerting if you have had a good relationship with your old manager and were happy with the way things were going.  In a word you should not worry if your property manager changes. 

However you should be especially vigilant for mistakes in the first few months of a new property manager.  If the company you are with has good systems in place then you probably will not have an issue but it is probably a good thing to keep a close eye on things just in case.  This is one of the benefits of going with a large established firm with a good reputation over someone that is operating on their own or starting a new firm.  The probability that a small firm gets a good replacement for you is lower than a large firm. 

If the new property manager is not up to scratch then there are several things you should do:

1. First talk to the new property manager and make sure that your expectations are understood.  They are probably getting used to a hundred different landlords and it could be that they just briefly dropped the ball - give them a chance to get up to scratch
2. If this doesn't work then speak to the management of the firm: They will either get that manager in line or allocate you to a new one who does know what they are doing
3. If this doesn't work then move to a new manager:  In your property management contract you should not have a break fee or notice period - the property management firm will always try and include these in the contract - make sure you take it out.  Before you give notice to your old management company make sure you have a new manager all lined up!