How (Not) To Pick A Property Manager

I truly debated whether or not to publish this. I don’t want to be a “complainer”. However, this was a difficult situation to navigate, and I learned a lot about business and real estate through it. I decided to publish it, because I think it can help my readers to pick a property manager.

pick a property manager


They placed a tenant who quit paying rent after 4 months. They made errors in the application process, management, and accounting.

Due to oversight and sloppiness on my part, these mistakes went unnoticed. Eventually, I had to fire this property manager and remove the tenant myself.

On the bright side, I learned some valuable lessons.

Using a property manager isn’t passive. You have to hold them accountable, regularly. Here are some things I’ll do differently next time.

  1. Test the company for responsiveness

    It was impossible to get a decision maker on the phone. I find it unacceptable to have a 3 day response time, especially when a tenant isn’t paying rent! I’ll be sure to test this next time.

  2. Require final sign off on tenant placement

    I was too lazy and trusting to push them for details on my new tenant. As it turns out, they simply did not verify much of the information on the application. This was apparent after I fired the property management company and met the tenant myself.

  3. Find out what their process is when the tenant stops paying rent

    No one ever told me my tenant missed a rent payment. I assumed he just paid after the disbursement cutoff, and next month’s check would be double. Next month’s check was short too. I didn’t learn that my tenant skipped a month of rent until after 3 days of trying to get in touch with this PM. They made two separate payment agreements with the tenant. Both of which were broken. After the second, I fired them.

  4. Confirm the dogs and deposits

    This PM only collected 1 dog deposit when there were 2 dogs living in the house. The tenant even disclosed 2 dogs (with breeds) on his application. They still missed it. Also, one of the dogs was a German Sheppard. Most home insurance policies, including mine, specifically exclude the German Sheppard breed. I don’t know what would’ve happened, had there been an attack.

  5. Stick with managers who charge a percentage of rent collected

    Now I see why the PM was happy to be strung along by the non-paying tenant. This is why they kept making new payment plans. They charge a flat fee. I was paying this fee regardless of how much rent they collected. Next time, I’ll stick with a manager who only gets paid when I do.

I gave this company multiple opportunities to correct these issues. However, they showed no interest in hearing my complaints.

I’m not sure they realized that I meet with other investors on a daily basis. Now, every time property management in Birmingham comes up in conversation, I can’t help but tell this story.

It’s a lesson for all business owners, myself included. If you mess up, make it right. Show some empathy or remorse for your mistakes. Otherwise, you’ll drive your past clients to advocate against you.

I’m making a lot of mistakes as I grow. If I share these experiences with others, then my mistakes are “value-added”. Ideally, similar situations will be avoided by other members of the community. I hope this post helps other people looking to hire a property manager.

I wrote an article that covers 67 Lessons From My First Year In Real Estate. It’s filled with all kinds of other lessons I’ve learned by experience.

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