When and How to Switch Property Management Companies for Optimal Results

When you hire a property manager, you expect them to save you time and effort. They are supposed to handle the landlord’s stress for you. Choosing a reliable property management company ensures smooth operations, effective communication, and expert handling of your property. 

Ideally, property management companies would consistently deliver excellent service. However, there are times when rental property owners need to consider switching managers. This transition requires careful planning and effort from the landlord. Understanding the reasons, methods, and timing for making a switch helps owners evaluate if it is worth the effort. By knowing these factors, owners can ensure a smooth transition and improve their property management experience. Proper evaluation and strategic planning can lead to better service and potentially increased profitability for the rental property. 

Reasons to Switch Property Management Companies 

When issues arise with a management company, landlords should first discuss them with the property manager. This open communication can often lead to improvements. However, if things don’t get better, a change is necessary. Here are some signs that might prompt landlords to consider switching management companies: 

1. Increased unexpected costs: Property management fees and their services should be clearly outlined in the contract. A company that provides clear, reasonable explanations for any additional charges demonstrates integrity. If unexpected costs arise, it might be a reason to reassess and find a new management company that values transparency. Be cautious of companies offering very low introductory prices, as they may not provide the best value. Always prioritize value over price. 
2. Run-down property: A management company’s role is to protect the owner’s investment by ensuring the property is in top condition. Neglected maintenance issues can escalate from minor inconveniences to major problems. This can lead to higher repair costs and reduced appeal for tenants. Ultimately, these issues can also decrease the property’s value.  
3. Tenant move-outs: High turnover can often be expected in areas with neighborhood decline or economic challenges. However, if these conditions haven’t changed, the issue might be related to the building itself. If even long-time tenants are relocating, it could indicate that some improvements or changes are needed. 
4. Renter complaints: An increase in tenant complaints about the property’s condition, fellow residents, or the management company should be addressed promptly. Ignoring an unhappy tenant’s concerns may lead them to seek a new place to live. 
5. Outdated operations: Modern landlords and tenants expect property management companies to offer current services, such as online maintenance requests and automatic rent payments. Many companies provide online portals for viewing financial statements and monitoring property status. If your current company still requires written checks and sends reports via mail, it may be time to consider switching to a more up-to-date service provider. 
6. Lack of communication: Landlords require regular updates on their property’s status. If a property manager fails to provide routine reports or is unreachable when needed, it is time to switch to a more responsive company. 

What to Look for in a Property Management Company 

Switching property management companies can be stressful, but finding a trustworthy firm that helps your property succeed is crucial. It’s essential to select a management company that aligns with your needs and those of your unit owners. Here’s what to consider when choosing a property management company: 

1. Experience: Choose a company with 10, 15, or 20 years of experience. Their longevity often indicates a proven track record and a broad range of managed properties. This experience suggests that they have the expertise and reliability to handle various property management challenges effectively. 
2. Versatility: While many property managers concentrate on daily tasks and crises, top property management companies like BFPM provide much more. We keep you informed with regular updates, alert you to changes in property value, and help time your unit sales for optimal results. Additionally, we understand exit strategies and work with you to develop a personalized plan that meets your specific needs. 
3. Trusted Management: You need to look for a company that values honesty. You can interview multiple agencies and compare their charges for services like lease-up fees and inspections. Ask about their approach to property management, including how they handle inspections, repairs, and maintenance. 

You should inquire if they have an in-house maintenance team and if they have a strategy for reducing costs. Ensure to ask about: 

• Their tenant screening process 
• How they manage repairs 
• Their methods for collecting rent 
• Their overall management approach 
• The services they provide 

While it may seem like a lot of work, thorough research will help you choose the best company for your needs. 

How to Switch Property Management Companies 

Changing property managers can be easy if you plan it carefully. Avoid ending your contract abruptly or right when rent is due to prevent any issues. With some organizations, the transition can be smooth and hassle-free.  

1. Determine the Best Time for the Switch 

Consider making changes to your property management right after a late rental due date. For instance, if rent is due on the 1st and tenants have until the 7th to pay, start your management transition on the 7th. This gives you three full weeks to ensure a smooth transfer. During this time, be sure to redirect all rental payments and update mailing addresses. 

2. Select Your New Property Management Team 

Before ending your contract with your current management, take some time to research and find a new company. Exploring your options will give you a clearer understanding of what’s missing and help you find the right fit. Ask plenty of questions to ensure you make a choice that meets your needs, so you won’t have to go through this process again. 

3. Review Your Existing Contracts and Leases 

Ensure you check your contract with the management company to see if there is a notice period required for termination. If there is, you might need to wait until that period ends unless you are very unhappy with their services. 

4. Inform Your Current Management Company 

Be sure to inform your current management both by phone and in writing about your upcoming changes. Share these key details: 

1. The reason for switching management 
2. The date the change will take effect 
3. Your expectations for the transition 
4. The contact information for the new company 
5. Maintaining open communication during this time is important. Even though your formal relationship is ending, you and the management company can benefit from the experience. 

5. Update Local Authorities as Needed 

You may need to notify local authorities when you switch property management companies, primarily for tax reasons. To avoid any fines or fees, ensure you provide the necessary information to all relevant tax departments. Keep in mind that regulations vary by state, so it’s a good idea to research your local rules to ensure you are meeting all requirements accurately. 

Pros and Cons of Switching Property Management Companies 

If you are unsure about switching property managers, take a look at these pros and cons to help you make an informed decision: 

• Pros 

1. Reset tenant expectations regarding rules and payments 
2. Enhance cash flow and property turnover 
3. A new property manager can bring a fresh perspective 
4. Boost efficiency in property management 
5. Opportunity to update and improve your systems during the transition 

• Cons 

1. The transition period might bring extra stress 
2. Tenants could be unhappy if they liked the previous management 
3. You will need to handle transferring numerous documents and paperwork 

If you are considering changing your property management company, it is often a sign that it is time for a change. If things are going well, you probably wouldn’t be thinking about switching. If you have doubts, it could be a good idea to explore new options. 

Conclusion 

Whether you are choosing a property management company for the first time or switching to a new one, regular check-ins with your property and property manager are crucial. The best property management companies like BFPMInc. keep landlords informed and ensure everything is running smoothly. 

While finding the right company is important, sometimes switching is necessary for better service and peace of mind. Though transitions can be challenging, they often lead to improved property management and greater satisfaction. 

For further inquiries on our property management services, contact us at BFPMInc.