The Best Tips to Manage Your Property Manager – A Practical Example

“$3,200! That is ridiculous!” I exclaimed to my property manager.

“The city is demanding that you fix the leak in the main waterline and that is the quote we received. Do you approve the quote so the plumber can get it fixed?” He answered back to me.

“I don’t care what the problem is. I am not going to pay $3,200 to fix a leak.” I stated.

“Well, the plumber said they needed to replace the entire main line from the city street all the way to the basement of the house. It is old galvanized pipe and it all needs to be replaced. They need to rent a back hoe and dig a four-foot deep trench 15 feet long from the street to the house. That is why it is so much.” He explained.

I’ll pause the story right there.

As I tell you this story that happen to me recently, I want you to imagine yourself in this situation.

What would you do?

Would you say, “Ok, the city wants it done so get it done” or something else?

Do you know how to handle your property manager properly? Do you know how to treat your rental property as a business or do you let your property manager manage you?

Ask yourself these questions and think for a moment before I give you the rest of the story. Seriously, stop and think of a plan for this potential $3,200 expense. Take enough time to thoroughly think through this entire scenario before you read on.

I’ll wait…

…

????

You need to go through this entire scenario in your head to see how you would handle the situation because there is a right way and will.

Ok, have you thought through the entire process in your head?

Well, let’s proceed with the story:

“I’m telling you right now that I am not paying $3200 for a leak. There has to be another way to get this problem fixed. The problem is the leak, right? Didn’t the city say to fix the leak? They didn’t say to replace the entire main line.” I questioned.

“You are right, they only said that the leak needed to be fixed. The plumber we sent out there to give a quote to fix it said the entire line needs to be replaced and that is the only way to fix the leak.” He explained from his very little knowledge about the situation.

“Well,” I said. “There are some things I need to make a wise decision about this problem.”

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Your Property Manager Relies on You to Tell Them How to Manage

You see, the property manager should have all these answers already before he contacted me. I should not be the one you have to think of these questions. Not to say that my property manager did anything wrong, per say.

He, and most property managers, don’t think of these questions because they are paid to solve problems, not save you money. Problems like:

1. The property is not rented, find a tenant
2. The property needs to be painted, find a painter
3. There is leaking, find a roofer to fix it

The property manager is really only concerned about his business and if it runs well and makes him money. Of course, they are also concerned about your business and that you are happy, but they will not think as if they are the owner of the property.

They want to solve the problem quickly and move on to the next problem. It’s not their fault, they are only human. Rarely do they think more than one step ahead when it comes to your business. There was a problem, which was the water leak, and he found an answer to it. Even though it was a ridiculous one answer.

It is not coming out of his pocket to pay for this repair so he doesn’t think like an owner was.

Therein lies the problem.

He is running his business as he sees fit, you need to run your business as you see fit.

If you go with the first solution the property manager gives you, you are not running your business. It is up to you to tell him how to run your business. Think of your property manager as your employee. He should only do what you tell him to do.

To Make Wise Decisions, Get as Much Information As Possible

You can see that there is very little information given to me by my property manager. Hopefully you can see all the gaps in the information already and have questions yourself.

Now let’s continue:

“Before I can make a decision, I need these questions answered.

1. First, is the water leak our responsibility, or is the responsibility of the city?
2. Second, do we really need to replace the entire line from the street all the way to the house? Can we just replace just the portion of the pipe that is leaking?
3. Third, how much water is leaking? Is it gushing out and the problem is dangerous or is it a slow leak?
4. Fourth, do you have any more quotes than this one quote? Any repairs over $1000 MUST have at minimum 2 quotes from 2 companies. For a $3,200 problem, that requires 3 or more quotes.
5. Fifth, have you physically seen the leak yourself? Or are you relying only on the plumber’s opinion of the problem?
6. Sixth, how urgent is this situation. Is the water going to be shut off and the tenant will be without water? Before I can make any decision, I need more information.
7. Seventh, do you have any pictures of the problem so I can see what we are talking about?” I asked trying to remain patient.

He explained, “Well, I don’t know if it is the city’s responsibility or yours. We received a letter from the city stating that it was your responsibility and they require it to be fixed immediately. About replacing the entire mainline or just a section, the plumber said that the only way to fix it is to replace the entire line. As to your other questions, I don’t have those answers.”

“OK, please find those answers and get back to me.” I told him

“If the city shuts off the water because we are taking too long, are you willing to put the tenants up in a hotel because they don’t have any running water?” I said sardonically.

“Well, we will have to cross that bridge when we get to it. Right now, get me those answers so I can make a wise decision. Especially, get me at least two more quotes for this, and all other issues that are of this dollar amount. The problem the city wants fixed is the leak. That is all. Let’s find other solutions to fix this leak and make sure the city is appeased.” I said successfully holding back my irritation.

Now, without the right information, it is very easy to make the wrong decision. If I would have approved the expense, I would have thrown away $3,200.

Stop for a second. Would you have approved the $3,200 repair without asking any questions? Do you have any other questions that should have been asked?

If you would have, the problem would be fixed BUT, you would have spent $3,200 needlessly. You wouldn’t know if you could have saved money if you just took the property managers word for it.

Question the Property Manager to Make Sure They Are Talking to Vendors Properly

“I talked with other plumbers and they said there would be a service fee” he stated.

“Did you ask them to give you a ballpark estimate for the work needed? If they ALL are saying they need a service fee to view the problem, did you try to get them to give you an idea of what it would cost by explaining the problem? Did you explain the situation to them thoroughly? Did you explain that there is a leak and we only need the leak fixed in one section” I asked?

“Yes, I did explain it to them properly but I did not ask for a general estimate for the work. Are you fine with paying the service fee” he asked?

“Well, one of two things should be asked. First, there must be some plumbers out there smart enough to give a free quote for this big of a job. Keep pressing them to agree to quote without a service fee. Second, if they MUST have a service call, get a general quote to see if we want to send them out there to get an accurate quote. Last thing I want is to PAY someone for a quote that will be higher than the one we already have” I said.

“I don’t think they will do it without a service call but I’ll ask” he said.

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You May Need to Do Some of Your Own Homework to Get the Right Answers

And on with the story:

“Also, most plumbers we work with require a fee just to look at the job. If you want another plumber to go out there and give a quote, are you fine to pay their service fee” My property manager asked?

“Service fee? This is a quote for a big job. Not to fix a toilet. There should be plenty of plumbing companies out there that would quote this for free. Keep calling other plumbers until you find ones that will quote the job without a service fee.” I said.

“Well, if we cannot get any that are willing to not charge the service fee, are you ok to pay the service fee?” He questioned.

“I guess, but it should not come down to that.” I said as I hung up the phone.

At this point, I am getting very irritated at my property manager. It doesn’t seem as though he is looking out for me. I should not have to be the one to think of these things and force them to comply.

Again, it is not really their fault. They are in the business of making money and solve problems. It is my job to make sure my business makes money and does not spend needlessly.

Since I have been doing this business for a long time I knew there must be plumbers who would give me a quote for free.

After we hung up, I knew I would have to prove my point to them because I knew I was right. I immediately searched for plumbers in a web search for plumbers in the area. The first one on the list that had 4.5 out of 5 stars seemed fine so I called them.

A two-minute conversation with the plumber confirmed that I was right.

This plumber didn’t even mention a service fee and was ready to inspect the problem and give me a quote right away. I didn’t even need to press for a general quote for a job like this because they didn’t’ mention a service fee.

Having confirmation, I emailed my property manager informing him I called only one plumber and they agreed to do it without a service fee. He conceded and found another plumber to give another quote.

This shows that the property manager needs to work harder to try to save you money. When it isn’t their money, they are not so protective of it.

Since it is your business, you need to be protective of your business and your money. Don’t rely on others to do that for you.

Short-Term Rentals Are A Little Different

There is a difference between short-term and long-term rental properties in how you need to manage them to make the most money.

There are a lot more moving parts and things to manage for your property manager and how you manage your property manager will change. 

A short-term rental is a business and you need to make sure you take care of it as a business that makes money every month. 

Make sure you give extra business systems and processes to your property manager to make sure they do your business the way you want it to be done.

Even When You Think You Are Done, Keep Going.

Always Question, Always Use Your Smarts, and Always Be on Top of Your Business. Even though I have had win after win over my property manager, I never stop questioning until the job is completed.

Continuing the story:

“Well, we got another quote like you asked and this new plumber quoted $2,100-$2,300 for the entire job. The same job specs as the first plumber” he said.

“That is $1,000 saved! That’s good news” I said.

“Now we know that it is your responsibility to fix the leak. Do you approve of the lower quote of $2,100-$2,300 for the job” my property manager asked?

“So, I still don’t know if we need to replace the entire main line or if we can just fix the leak. I can’t make a decision until I get a quote for just fixing the leak” I stated.

“Well, the first plumber who quoted $3,200 said the city requires that you replace the entire line since galvanized lines must be replaced entirely” he explained.

“The plumber is probably right but I need you to verify that is the case with the city. The city wants the problem fixed. That problem is the leak so I want to make sure we don’t kill a mosquito with a bazooka. If the leak can be fixed in one section, then I would rather do that. Spending $500 instead of $2,300 is much more appealing. Would you please make sure by calling the city water department and verify we are really required to replace the entire line” I asked?

“Ok, I’ll see what they say” he said with frustration that I was giving him another thing to do.

Actually, he would have just taken what the plumber said as true and not checked. But because it is my business, it is up to me to think through every scenario thoroughly.

Keep Pressing Forward with What You Know Is Right

Let us continued the story.

Two days later, I received a text from my property manager with pictures of the problem after the property manager physically inspected the problem.

As you can see in the pictures, there clearly is standing water. It is not gushing and it is not urgent.

I want to ask you what else you see in the picture. Is there anything else peculiar that you notice?

Go ahead and take a closer look at the them again.

Do you see anything interesting that stirs up even more questions?

Well, what I see is a totally new section of asphalt in the street. Two things come to my mind.

1. The city has already verified the problem as my responsibility
2. The city caused the problem with whatever work they were doing

Obviously, the conversation continues with my asking these questions in an enlightening phone call.

“Dustin, did you get the pictures” he asked?

“Yes I did. They are interesting. Tell me what you see and what else you have found out” I said.

“Well, actually, this is the same problem we have been telling the city about for two months. The tenant noticed it and we notified the city. Do you see the repair to the street where the leak is? The city came out, dug up the street to fix it and found that it is your property so it is your responsibility” he said with much more patience in his voice than the past few times we talked.

“Oh, so you, and your company knew about this problem before you received the original letter from the city? And you were the ones to report this problem to the city” I said.

“Yes, that is correct” he said as he was trying to save face from this entire problematic experience.

“So this problem is not urgent, the city already verified that it is our responsibility by doing work in front of the house, we have two quotes now, and we will not need to worry about putting the tenants in a hotel room. This is good news. Then the last piece of information we need is whether or not we need to replace the entire line or just fix the leak. Get back to me when you have that info” I said as I hung up the phone.

From this point, things are looking better and better. Even though it was my property manager who reported this, the problem still needs to be fixed.

With this last bit of information, I can make a wise decision about the problem because all of the information will have been found out.

Almost done.

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When You Run Your Business as A Business, Things Work Out for The Better

Two hours later, I received this text from my property manager:

“You are not required by the city of Akron to replace the entire line.”

This problem keeps getting smaller and smaller with the answering of good questions when the problem was presented.

If you remember, this problem was:

1. Immediate and urgent
2. Cost settled at $3,200
3. The City found this problem and notified me that I am responsible for it
4. Make a rash decision to fix it or not
5. Be ready to put the tenant in a hotel if the urgent problem is not fixed and the city shuts off the water

Now, the answer is:

1. Not immediate nor urgent
2. Cost is at most $2,300 to replace the entire main line
3. It is possible for the leak to be fixed in the section that is leaking to reduce cost
4. The property manager knew of the problem but didn’t realize this was the same issue or was not wise enough to piece together that the problems were related
5. There is plenty of time to find a reasonable price quote and get multiple quotes for the job
6. No need to place the tenant in a hotel

From this point forward, with all the proper information, I am able to make a wise decision to solve the problem.

Use Tact and Respect When Dealing with Property Managers

Even though I was right on many levels in this scenario, you can see that I always remained respectful and tactful. Never once did I rub it in his face that I was right or that he was wrong.

Even though I was right time and time again AND he got more irritated the more I made him work to figure out better solutions to the problem, I never gloated or rubbed it in his face. Even when he should have known this was the same problem they have been reporting to the city for the last two months.

He knows I was right over and over again. He is smart enough to know that my making him work harder was the right thing to do even though he disagreed with me at the time.

Now, because I handled my business properly,

1. I saved myself lots of money
2. I showed my property manager I know what I’m talking about
3. That I know how to run my business
4. That I possibly even know more than he does about rental properties
5. He is still my employee and he is to do what I ask him to do.

There have been many other situations similar to this that I had to stand firm and make my property manager do more work. Even though it has happened before, I always remain respectful and humble.

For you, make sure you remember that your property manager is your employee and is on your side. They are on your side until they are not. If you are running your properties as a business, you will know when you have a bad property manager. Then it is time to fire them quickly and hire another one.

In the case of the water line, it was not incompetence nor was it negligence. In the case of incompetence or negligence, fire your property manager and find someone else.

When it comes time to find a new Property Manager, check out these blog posts that will help you successfully hire a new one.

Remember to Run Your Business as a Business

To sum up some key points for you in the future:

1. Always get as much information before you make a decision
2. You are in control of your business, not your property manager
3. Trust your gut. If you need more information, ask for it
4. Never make rush or hasty decisions without information. Unless completely necessary (fire, policy, city policy, etc.)
5. Your property manager’s job is to solve problems. Your job is to make sure he does it up to your standard
6. Be respectful and act with humility. Even if you are right, there is no need to make anyone feel ashamed unless they

How about you? Did you think of other things that I missed? What else would you have done or not done? Let me know by leaving me a comment below.