Most investors hire a property manager the same way they'd hire a handyman. They Google it, read a few reviews, check the price, and sign.
And then they wonder why it went sideways.
I've been a property manager for 22 years. I run One Focus Property Management in central Pennsylvania. We manage 600+ residential units and I have watched this play out more times than I can count. Not all property managers are created equal, and it is very difficult for most investors to know how to vet these most crucial team members. That’s only half the problem because you will almost certainly need to manage or maybe even fire a property manager over the very long hold period of your investment. This is my best attempt to give you the inside view on how to do all of that well.
Not the surface-level stuff. The inside view.
How to Find the Right Property Manager
Start with licensing
In most states, property management is a licensed activity. In Pennsylvania, you need a broker's license to manage property legally. Salesperson licenses don't cut it. Before you go any further with any candidate, find out what your state requires and then verify that the people you're considering actually meet that requirement.
Look up their license numbers. Then look up their disciplinary records. Every state real estate board has a public portal. Use it. A clean record isn't a guarantee of anything, but a messy one is a disqualifier. For PA professionals, use this link: https://www.pals.pa.gov/#!/page/search. You need to verify that they have the appropriate licenses and that there isn’t any disciplinary records that you aren’t aware of.
Ask where your money is kept
Most investors never ask this question. They should. Your property manager is collecting rent on your behalf and holding it before passing it along to you, which means your money is sitting in their account. You need to know where. Ask specifically which bank they use, whether your funds are held in a true third-party trust account separate from the company's operating funds, and whether those accounts are FDIC insured. A legitimate property manager will answer these questions without hesitation.
Then ask who is reconciling the books. Reconciliation is the process of verifying that every dollar collected matches every dollar accounted for, and it needs to happen on a regular basis. I believe strongly that this should not be done entirely inside the organization. When the same person collecting the money is also the person reconciling it, that is a control gap. The gold standard is an external reconciliation process, whether that's a third-party accountant or an independent oversight layer outside the day-to-day management team. I understand this is not always how it's done, and keeping third-party trust accounts properly reconciled is genuinely difficult work. But it matters, and the quality of the answer you get to this question will tell you a lot about how seriously this company takes their fiduciary responsibility to you.
Look for professional involvement
Does this company belong to NARPM (National Association of Residential Property Managers), IREM (Institute of Real Estate Management), or the National Apartment Association? Have they or their team pursued professional designations (those are the letters after their name)? Are they involved in their local real estate community? Memberships and involvement tell you whether property management is a career they take seriously or just something they do on the side.
Go to your local investor meetup and ask around. First-hand experience from people in your market is worth more than a hundred Google reviews. One of the best things about investor meetups is the culture of sharing and helping others. You are sure to find people in that room who have worked with the local property managers. You can ask for references, but I prefer to go in the wild and see what I can learn.
Audit their focus
Here's the inside baseball part. A lot of people who call themselves property managers also sell homes, do appraisals, or run a dozen other real estate services. There's nothing wrong with that inherently. But I want to know: where does their time actually go? What are they an expert at? Where do they bring the most value? Because property management is a very different skill set than real estate sales, and in my opinion, these two skill sets are rarely present in the same person.
Look at their website. Look at their social media. If 95% of what they post is about home sales listings, their time and attention is not on property management. You want someone for whom this is their primary business, not something they fit in the cracks.
Read reviews like an insider
Property management companies tend to have mixed reviews. Here's why: we serve two audiences. We serve property owners (our actual clients), and we serve tenant residents (our clients' customers). And sometimes those interests are in conflict. After all, the property owner wants me to reject the rental application that isn’t qualified or evict the tenant that isn’t compliant. You can see how those activities attract bad reviews. That's not bad management, that's management doing its job!
There is a lot to be learned in the reviews. I want you to be critical of the reviews and the responses by the property management company. It is easy to tell what is going on when the management company is responding to their reviews.
Use the genius hack: shop them as a tenant
Find a property they're advertising for rent. Inquire about it. See how long it takes them to respond. See how they treat you. Because how they treat a prospective tenant is exactly how they're going to treat your actual tenant. If you're not happy with what you see, that's valuable information.
Understand how they're structured
Property management companies generally run one of three ways:
Portfolio model: Each property manager and their small team oversees a portfolio of properties end to end. You get one point of contact who knows your stuff. The downside: when your primary contact leaves, will you be as happy with the next one?
Departmental model: Leasing, maintenance, accounting, and tenant relations are each handled by a specialized team that serves the whole portfolio. You lose the one-point-of-contact convenience but gain consistent expertise across the board.
Hybrid: Some combination of the two, usually centralizing accounting or leasing while keeping other functions at the portfolio level. This combination aims to provide clients with one point of contact while still getting the efficiencies of centralizing some functions.
No approach is wrong on the whole, but there may be an approach that is right or wrong for you and your expectations.
Get clear on fees — all of them
Most investors ask about the management fee and stop there. That is a mistake. The compensation you are paying to a property manager is usually more than just the management fee. Fee structures aren’t universal or standard in property management, so you need to ask about all the fees. To help you understand the variety, here are some fees you can expect to see.
- Management fee: Usually a percentage of collected rents, not charged rents. This alignment of incentives is one of my favorite things about this industry — when you're not getting paid, your manager isn't either.
- Leasing fee: Charged when a tenant is placed. Usually between 50-100% of one month’s rent. May or may not include listing photos/videos, showings, advertising, application underwriting, and tenant onboarding.
- Renewal fee: Charged when a lease is renewed.
- Inspection, eviction, and technology fees: May be included or charged a la carte.
- Maintenance markups: If your PM is coordinating vendors, ask if they're marking up invoices. Ask if they have ownership, partnership, or any financial relationship with those vendors.
- Tenant-paid fees: Application fees, resident benefit packages, late fees, pet rent. Ask who keeps these and why.
None of this is inherently wrong. Property managers find different ways to capture the value they create. But you should know how they're making their money before you sign, not after you get a bill you don't understand.
How to Onboard and Manage Your Property Manager
Set your expectations
The biggest mistake new clients make is expecting their property manager to operate like their realtor. Realtors are one-on-one, boutique, text-you-at-9pm people. The nature of their work with you may require that.
Property managers run systems and that means they usually aren’t giving you the cell phone number and asking you to call anytime. They are providing services 24/7, after all maintenance emergencies are constant, but they aren’t generally providing client service outside of business hours. They will reply during business hours.
What matters most is that you know what you need and find a manager whose approach is a match.
Know the monthly cycle
Property management runs on a monthly rhythm, and you will need to get oriented to it so you can make sure your manager is running your portfolio well. You need to know:
- When rents are collected
- When your draw (your money) gets sent to you
- When your monthly statement is issued
- When your leases and licenses expire
- When and how you'll be notified about renewals, delinquencies, and other issues
- When you need to make a decision about renewing your contract with the property manager
Write these dates down. Put them in your calendar. Not knowing when to expect something means you won't notice when it's late.
Know how to communicate with them
Every company is different. Some want you to email. Some have a ticketing system. Some have a portal where you can log and track everything. Ask upfront: what's the best way to reach out when I have a question? And what's your response time commitment?
I'm not saying it needs to be fast. I'm saying you need to know what to expect so you recognize when something is actually wrong.
Inspect what you expect
This is the most important principle I can give you in the management phase. Don't assume things are being done correctly just because you hired someone to do them. Especially in year one.
- When a lease is executed, ask to see it. Verify it's complete and properly signed.
- When an inspection is done, look at the photos. Ask questions.
- Read your monthly statements. Find the things you don't understand and ask about them. Do this now so that when something real comes up later, you already know how to read what you're looking at.
Get clarity on authority before you need it
Who decides which tenant application gets approved? Who decides when to serve a notice to quit? What's the threshold for maintenance approval? What lease terms are being offered?
Work through the hypotheticals. Write down the answers. Because in a long property management relationship, these things will come up, and if you never agreed on who does what, you'll find yourself in conflict at the worst possible moment.
How to Fire Your Property Manager
Try to fix it first
Before you go down the road of firing, make sure you've actually tried to resolve the problem. Put your concerns in writing. Use their system. If that doesn't get traction, escalate directly to the broker of record — not just your property manager, but the licensed broker who is legally responsible for the office.
A lot of issues get resolved at that level. The broker often doesn't know there's a problem until you tell them directly. Share your situation and how you feel they are missing the mark in providing you the property management service you were promised. In this conversation you're looking for a plan you can believe in. If you decide to accept that plan, you must seek out evidence that they're executing it.
If you go to the broker and get silence? That's your answer.
Know why you're leaving
You might be able to work on fixing the problem, but there are several times when you need to be quicker to terminate.
- They committed to a plan and didn't follow through.
- You're not receiving monthly reports.
- You're not receiving your draws. This one is serious.
- There's been disciplinary action taken against the office or broker
- The communication has broken down completely and you've escalated with no result
Read your contract before you do anything
Look for the termination clause. How much notice is required, 30, 60, 90 days? Is it a rolling notice or tied to a contract end date? If you just renewed and you're staring at 11 more months on the agreement, that doesn't mean you're stuck, but you'll need to negotiate, and you'll need to advocate for yourself clearly.
The transition is where investors blow it
This is the part nobody thinks about until it's too late. The biggest risk of a clumsy exit isn't losing the property manager, it's losing your tenants. Qualified, compliant tenants who feel unsettled by a management change will leave. And replacing a good tenant costs more than a bad property manager.
Here's what a clean transition looks like:
- Agree in writing on when services stop and when the new manager (or you) starts
- Get clarity on who holds the security deposits and how they'll be transferred
- Agree on how and when tenants will be communicated with, this should give them confidence, not anxiety
- Get your full handoff package: keys and access codes (test all of them), full tenant ledger history, work order history, move-in inspection documentation, and the complete lease packet with all addendums
- If your property was built before 1978, make absolutely sure you have a lead paint addendum in that file. Check every page of every lease for missing signatures and initials. You do not want to go to court to enforce a lease and find out it wasn't properly executed.
An honest heads-up: Most property managers drag their feet on offboarding. It's just true. Make it more likely you will get your stuff promptly and completely by telling them in writing exactly what you need and by when. It drives accountability and it protects you if they don't deliver.
Keep everything in writing
After every phone call with your property manager, send a brief recap. Something like: "Thanks for the call. Here are the three things we agreed on and the deadlines we discussed. I'll be following up." That's it. It signals that you're paying attention. It creates a record. And it makes people take their commitments more seriously.
The Bottom Line
Hiring a property manager is not a one-time transaction. It's a long-term relationship that directly affects the performance of your investment. The investors who get this right do the work upfront, stay engaged without micromanaging, and know how to hold their manager accountable without blowing up the relationship.
And when it's time to move on, they do that well too.
I made a three-part video series on this topic that goes even deeper — you can find it on my YouTube channel. And if you want more of this kind of content for buy-and-hold investors, I make a podcast called Hold It with PM Jen. Find it wherever you listen.
