Real Estate Journal: Bad Property Management

This is going to be a brief course on a few things you might want to consider, if you should happen to go into investing in rental properties.

It can be a rough and gritty business, and the odds of making an immediate profit are extremely slim. But over the long term, it is a path to great wealth.

Of course, I have to keep reminding myself of that little affirmation, because some days it taxes me in ways even Uncle Sam would consider cruel.

I wonder why I mortgaged the home I owned outright, just to buy this huge thing that takes my money and gives me nothing in return. Then I remember Robert Kiyosaki, and how he turned houses into apartment buildings, and those buildings into huge revenue streams.

If he can do it, I can do it. I have to – there won’t be a government handout waiting for me if I fail.

But on the path toward creating this nebulous thing called “passive income,” I’ve encountered plenty of problems. And the one I’m going to talk about this time is bad property management.

In the city where I live, there are roughly 1,400 property management companies and individuals currently practicing their trade.

Unfortunately, not only is that number unwieldly in the extreme, it belies the fact that most of them truly suck. I wish there were a pretty way to put it, but sucky is as sucky does.

I have had to learn that there are times when I should trust what my gut tells me, and times when I should just tell it to shut up and let me operate.

Generally, when I’m fighting off my own laziness, that’s a time to just “shut up and work.” But when I get a sickly feeling in the pit of my stomach about another person, it generally means that doing business with them is going to hurt me badly.

My former property manager was a prime example of this fact. Every time he and I had a meeting of any kind scheduled, I always felt a sickness.

And when we met, he was always negative about something (or several somethings). If you’re going to hire a property manager, remember that they’re a sales person. Positivity is a key trait that they need to have.

Another thing that you might want to look out for is how much they think they’ve “arrived.” If your property manager shows up in a fancy car, and wears a watch that looks like you’d have to save up for a few months to buy it, that’s a sure sign of middle class pretensions – which have no place when dealing with poor people.

Poor people may respect money, but they tend to try to leach it away from those they perceive as having it. Modest dress and modest transportation tend to lead to a grounded mindset.

Then there’s the issue of lying. If a person promises one thing and doesn’t follow through, that’s a serious problem. In the hood, I deal with a lot of people who “back slide,” or make promises that they don’t keep.

When it’s a matter of agreeing to a time and being late, that’s to be expected – clocks matter little to people who live in the moment.

But when it comes down to making sure they do administrative tasks like direct depositing your checks, getting paper work back to you or whatnot, every time they fail is a time you need to be checking out the other property management options that exist out there.

A modest, honest, positive property manager is worth holding onto, and work taking care of. Your property and your freedom depend on this person.