When a Detroit Property Manager Goes Out of Business
“This, too, shall pass.”
We received word a few weeks ago that one of our major competitors in the Detroit area was going out of business. Of course, it’s always good news from a business perspective when a competitor leaves the arena, but we realize that many other people might have a different experience, and we wanted to share our best advice on how you — as a tenant or as a property investor — can ease the switch to a new Detroit property manager.
As a Tenant
Fortunately, as a tenant, the process should be relatively painless. Legally speaking, if your Detroit property manager disappears, you’re still bound by all of the terms of your lease – there’s no free rent. Your lease is just transferred, by default to the owner of the property, or a new property management company the owner hires. In most circumstances, you’ll probably notice, but it shouldn’t be too much of a problem for you…just a different place to pay rent to and call for maintenance.
Worst-case scenario, if you don’t hear from anyone for a bit, you are legally required to escrow your rent until the owner or a new property manager contacts you.
Even if the owner of your home decides they’d rather sell it than deal with being a landlord (or hiring a new property manager), they must follow the terms of your lease. If they want you out to facilitate the sale, they may offer you an incentive to terminate your lease early.
As a Property Owner
If you’re an owner and your Detroit property manager just announced their closing their doors, or worse, just disappeared, you have to decide whether or not you want to find a new manager, or take over yourself. If you want to go DIY, you’ll find plenty of advice on our blog — we’re big supporters of DIY landlords just getting started around Metro Detroit.
If you’re looking for a new property manager to take over, well, managing your properties, that’s where you have to know what you’re looking for. There are different styles of property managers in Metro Detroit, each with their specific pros and cons. Picking the wrong style can lead to a boatload of unnecessary headaches for you.
The competitor that just announced their closing was a flat-fee management company. The obvious pro here is the appeal of the flat fee. The con is an owner must usually be more active and hands-on with their property(s). Expect additional fees if you’d rather not be hands-on.
Those investors looking for a more hands-off approach, especially those from overseas or who otherwise actually can’t get involved in their properties directly, will generally find a full-service property manager (like us) more useful. The pro is the full-service provided, the con is full-service may cost a little more.
Once you know the style of Detroit property manager you want to hire, you should read up on the most important questions you can ask a PM before rushing into signing up with them.
And if you happen to be interested in interviewing Royal Rose Properties, send us an email at OwnerLiaison@RoyalRoseProps.com — we’d love to hear from you.