If you are purchasing rental units the single biggest concern you will face as a landlord is the dishonest property manager. The problem is unfortunately significant and widespread. I have seen far too many examples of these costing investors thousands of dollars in losses each year. It is so bad, particularly in lower to middle income neighborhoods, that investor's losses on a national level run into the millions. A dishonest property manager can steal security deposits, rent checks and bill for unnecessary repairs. I have seen them remove expensive appliances like furnaces and air conditioners then report that a break-in occurred and replace them (sometimes the very same units) and then bill the owner. Usually before you suspect there might be a problem, several months can go by. By the time you get on top of it, especially if you are an absentee owner busy with your own affairs, a few more go by and before you know it, you have lost a few thousand dollars. If the property manager manages several properties, this is big money.
Recovery of money is almost nonexistent. These criminals know how to play the system; they know that it is unlikely you will do anything and way too costly for you to sue them. You can file a police report, but the police generally have too much on their plates to do much other than to take down a report. You can complain on line or to consumer complaint agencies then what? Prosecution is almost never successful because if it gets too hot for them, they close down open under a different name or leave town altogether. It's a losing proposition for you all the way around.
How to protect yourself from becoming a victim? Do your homework first before retaining any one. Do your own €due diligence€ investigate the individual or company thoroughly. Do a background check; search their names for reviews and complaints. See what others have experienced. Check them with the Better Business Bureau. Contact the Department of Real Estate (they must be licensed in most states). If they are not, move on fast. Here are a few good tips:
1. Use only a licensed real estate broker agency;
2. Conduct a thorough background check;
3. If engaged, keep in regular contact with them;
4. Always ask for before and after pictures to substantiate any requested repairs;
5. Insist that you phone calls are promptly returned (it's the #1 complaint about property managers).
6. Make sure they conduct inspections twice each year an take photos;
7. Stay on top of your account, question all deductions;
8. If your tenant is having their rent paid through a €Section 8€ make sure you receive the checks and then you pay the property manager their fee.
To learn more about these investments, please contact:
Richard C Maier, Broker-Owner
29688 Tierra Shores Lane
Menifee, CA 92584
Office: (951) 346-1605
Fax: (951) 346-1604
Clientservices@MaierRealty.net