Considering Hiring or Switching Property Management Companies?

2021-04-19

Considering Hiring or Switching Property Management Companies?

Property Management

There will come a time in almost every rental investment journey where you have to enlist the assistance of a property management company (PMC) to handle your growing portfolio. This typically happens when landlords are expanding their property portfolios to a size beyond the capabilities of self-management.

When it’s time to hand over the reins on your portfolio, you need to have a checklist of the things you need for the transition, what to do immediately after closing the contract with your new PMC, and how to make the turnover process as smooth as possible—especially if you have existing tenants in place. 

We’re sharing our Property Management Transfer Checklist to facilitate any turnover or onboarding. Internally, we refer to this as our “wish list”, because we rarely encounter owners organized enough to have everything, or competitors willing to send it to us. The list will help you ensure that your new manager can take over management as seamlessly as possible, so all that’ll be left for you to do is sit back, relax, and figure out what to do with all the free time you suddenly have.

Property Management Transfer Checklist

Below are two checklists: one for the things you need to prepare when you’re turning over an occupied unit to a PMC, and one for what to do after the new property management company has officially taken over handling your rental portfolio.

Keep in mind that all of the items listed in these checklists are only applicable if your properties are currently occupied at the time that you take on a new property management company.

Before the New Property Management Company Takes Over: 

Some documents are absolutely necessary to do a PMC handover, while others are merely very useful to have. In general, the more information you have, the better. But let’s break it down by what’s essential vs. what’s not, strictly speaking. 

Must-Haves:

– Current lease
– Current rent ledger or rent roll for each tenant
– Tenant contact information
– Details of who’s holding the security deposit and where

Nice-to-Haves:

– Move-In checklist, and other Move-In documentation of each tenant
– The rental application and ID on file for each tenant
– Signed Assignment of Property Management, Leases, and Rents form
– Rental registration/license for each property (if applicable)
– All notices and attorney contact information for any evictions that are currently in progress
– Clear pictures of all property keys (properly labeled) so the property management company can see which key corresponds to which lock, unit, or building
– Notification to the tenant(s) introducing the new property management company
– Contact information for existing or previous property management companies

After the New PMC Takes Over:

– Switch billing for all applicable utilities
– Have a “Welcome Aboard Package” for tenants that includes the following:

a. Notice of property management transfer (including contact information for the PMC or individual property manager responsible for the property)
b. New payment options and details
c. Information on how the new management operates (to manage expectations)
d. We include a survey to request confirmation of specific lease terms, occupants, pets, maintenance issues, etc. to make sure there are no surprises.
e. Inform tenants where their security deposits were transferred.
f. Contact the city and county as needed to update the owner or property management company’s mailing address for property tax bills and notices.
g. Contact Section 8 offices to start transferring payments to the new PMC.
h. Review any city-required rental licenses and certifications

What happens if my current PMC won’t cooperate with the transfer?

If your current property management company stalls the transition, it can lead to complications and delays. Without at least the must-haves covered, your only (embarrassing) option is to go knocking on tenants’ doors to find out this information.

As a last-ditch effort, you can report your PMC for bad practices, but this doesn’t change the fact that you have to find as much documentation you can to move forward with managing your rental properties.

Of course, the easiest way to transition is to make sure you choose the right property management company in the first place. Good ones are professional, even when they’re being replaced!

Conclusion

The whole transition or onboarding process needs to be done in a timely manner and as smoothly as possible, so tenants don’t become skittish and stop paying rent, or decide to move before the end of the lease.

Logical Property Management has had a lot of experience doing this – from the occasional perfectly smooth transition, all the way to PMCs who totally ghosted an owner. As long as you’re transitioning to someone who knows what they’re doing, they can help you move forward and get what you need, even if it will be difficult.

Need more help with switching property management companies? Drop your questions below and we’ll be happy to offer any advice we can.

 

 

One thought on “Considering Hiring or Switching Property Management Companies?

  1. what do property management companies charge for small strip malls. Approximately 11 units?

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