Red Flag Alert: What to Avoid in a Property Management Company

So you’re looking for a property management company to manage your rental or investment home—but where do you start? With so many factors to consider, the procession becomes overwhelming. Last month we published a blog about the top things to look for in a property management company (and you can read that here). However, along with what to look for, you should also consider the top ten things to avoid. Knowing both the red flags and what to look for can help you make the best decision about your property management needs. 

When hiring a property management company, you have a lot of investment and capital riding on their shoulders. In meeting with potential companies, be on the lookout for these things: 

1. Unprofessional Demeanor

This may seem obvious, but unprofessional behavior during a first time meeting is a signal for worse behavior to come. If a company cannot even be professional for their initial meeting with you, you can assume they will not be professional in handling your properties and/or tenants.

2. Limited Hours 

Though nobody likes to think about it, emergencies can and will happen at any time of the day or night. Your property doesn’t conform to the limited hours of a property management company. This is why availability 24/7/365 is a must. A good management company will take care of your home at any time, not when it is just convenient for them.

3. Lack of Responsiveness

This may not be something that you can immediately gauge on your own, but reviews can be a big help. How have other property owners’ experiences gone? Do they mention how long a company takes to perform maintenance? These are important things to take note of, because when choosing a company to manage your property, you want them to respond to problems/inquiries as soon as possible. 

4. Unwillingness to Provide a Reference

Always, always, always, ask a potential company to provide you with a reference from a current or past property owner. If they beat around the bush or refuse to provide you with a quality reference, this is a red flag. Entrust your valuable property to a management company with upstanding references from past or current owners. 

5. Below Market Rents

To a tenant, this might be an exciting quality. However, below-market rents, or rents that aren’t comparable to houses of similar size and quality, are not efficient at getting you the most for your money. You invested in real estate to build wealth, and below-market rents are not going to help you do that. Below market rents also suggests that the company doesn’t believe in the value of their properties. 

6. Hidden or Overly Expensive Fees

Another obvious one, but it still needs to be addressed. Your property management company should be transparent with their fees and additional costs upfront. Ask questions about rush fees, emergent repairs, etc. to determine how much you may spend. If the company seems wishy-washy or only discloses certain costs after you press them, this may be too big of a red flag to ignore. 

7. Poor/Infrequent Reporting

Property management companies have a duty to report to their property owners. This means the company should be sending monthly maintenance and collection reports to owners. Reports should be thorough and the company should respond to any questions regarding the report in a timely manner. Ask them how often they report, and use reviews to gauge their effectiveness. 

8. No Inspection Policy 

Inspections are a big proponent in reducing future costs. They ensure the physical and financial safety of both the tenant and property owner. Ignoring such a vital process of property management is a huge red flag, and these companies should be avoided. 

9. Record of Placing Bad Tenants

In the property management industry, bad tenants can happen. It’s just the way of the industry, and sometimes there is nothing companies can do to prevent it. However, a consistent placement of bad tenants is a big red flag. When hiring a property management company, you are trusting them to pick tenants that will pay rent on time and maintain the quality of your property. If they can’t choose tenants effectively, they likely won’t be able to manage your property effectively. 

10. Lack of Owner Mindset

Your properties/investments are your babies. Your property manager should view it that way too. Companies who treat properties like “just another number” are companies to avoid. 

Choosing the Right Company

Choosing the best property management company takes time and research, but in the end, it’s all worth it, because your property deserves the best in service and care. 

If your property resides in the Houston Area, consider Precision Realty and Management. We’ve been family owned and operated since 1989, provide thorough and timely service, and have a track record of satisfied owners and tenants. To learn more about Precision Realty and Management, visit or contact (281) 866-7400.