Some owners think you should manage everything that remotely touches their property. Most have never owned a rental property and have no idea what property managers do. If you don’t manage their expectations they will instinctively ask you to manage mortgage issues, utilities, home warranties, set up bank accounts, file foreign tax compliance forms, manage HOA issues, insurance claims and whatever else needs to be done, in addition to managing the tenant and maintenance. That’s a perfect definition of an asset manager but most owners don’t know the difference and neither do most property managers.
Often, large asset managers (or foreign investors) will ask you to set budgets, estimate NOI, get bids on insurance coverages, manage the code enforcement officer, manage property tax disputes, oversee insurance claims and a whole host of other duties you’re not trained to (or have the experience to) manage. To make it worse, you’re not being paid to do all that stuff for the lousy $70 a month management fee.
Private owners sometimes have the same ideas and need help understanding what you do for the fees they pay you or, better yet, what you don’t do. If you don’t define it, they will, and often their expectations are off the chart and totally unacceptable. If you don’t have a way to explain the limits of your services there will be tension between you and your client as you attempt to quell their unrealistic expectations as they come up. Defining the difference between an asset manager and a property manager is a great way to address the issue.
Managers need a document to send their owners (or make it part of their new owner sign up package) that identifies the differences. Over the years we developed a document differentiating one from the other so the owner can get their heads around what you do and don’t do for your fees. It’s a editable document so you can add your company name, tweak it to your model and publish it.
“The longer you’re in property management the more you realize that it’s sticky, often hostile, sometimes even litigious. Over 35 years I’ve been burned many times by owners, tenants, vendors, staff and third parties and after the second or third time (I’m a slow learner) I would go back to the attorney and have her draft a document that prevents it from ever happening again. Blaming property managers has reached an all-time high and isn’t going away anytime soon. So, understanding this reality, smart managers need to spend extra time, money and effort building/crafting documents designed to protect themselves, even from the folks they are trying to serve. We’ve pulled these documents from our archives and have listed them here for your review and downloading individually (or in packages by topic). We’ve laid this material out in the Property Management Life Cycle categories for purposes of giving the discussion some order.
Protecting yourself from Owners is what these documents are all about.
Download (PDF, 417KB)
The Property Management Lifecycle by Crown Investor Institute LLC