Evaluating the Property Manager

Case Topic: Overseeing property management and making a replacement.

Client Overview

I was brought in by a California-based real estate investor who had recently acquired a multifamily property in Southern California. This was not their first acquisition—the family owned properties throughout the state, with a portfolio that included multifamily and retail assets.

Though the client often self-managed properties in their local market, they typically relied on third-party managers for out-of-area investments. In this case, the acquired property came with a property manager already in place, and the client asked for my help to evaluate whether that manager was doing a good job—or if a change was needed.

The Issue

How do you determine if a property manager is quietly costing you time, money, and long-term value—and what happens when you discover they are?

The investor was busy running their own successful brokerage business and had neither the time nor capacity to deeply assess the property manager. On paper, nothing seemed immediately alarming. But instincts told the investor something wasn't right. Maintenance was dragging. Rents weren't climbing. And the reports coming in felt… off.

That's where I came in. I started by doing what many owners don't have the bandwidth—or expertise—to do: digging deep into the reporting.

The Impact

The owner's statements were the first red flag. While the property manager provided basic profit and loss and balance sheets, the reports lacked depth. They weren't exported from a professional property management software like AppFolio or Buildium. Instead, they were manually compiled in Excel. No scanned invoices. No digital access. No bank reconciliation. Rent was collected only via paper checks, and statements were mailed—not emailed—to the owner.

This wasn't just inconvenient—it was a risk. Without timely, transparent data, the client couldn't confidently track performance, evaluate spending, or make informed investment decisions.

Beyond that, the manager wasn't marketing units on major rental platforms, relying instead on outdated listing methods. There was no digital work order system, no tenant portal, and certainly no real-time maintenance tracking. Every corner of their operation felt stuck in another decade.

If left unchecked, this would lead to chronic underperformance—lower rents, slower leasing, delayed repairs, and, ultimately, diminished asset value.

My Approach

I've developed a thorough Property Manager Due Diligence Checklist from years of managing assets across California. I applied it here with full rigor. I evaluated reporting quality, accounting practices, lease activity, rent collection methods, maintenance response protocols, insurance coverage, and even reviewed the management agreement for compliance and risk.

The conclusion was clear: this manager may have been fine a decade ago, but they weren't equipped to deliver what this asset needed today.

But I didn't stop at critique—I offered a solution. Through my national CCIM network, I sourced three new property management candidates. I interviewed them, vetted their platforms, collected pricing, and narrowed it down with the investor. We ultimately selected a manager who not only had a more professional operation, but used the same property management system the investor already used across their other holdings—ensuring smooth reporting and system integration.

I handled the transition process, introduced the new manager to tenants, and made sure the handoff didn't disrupt operations. Most importantly, I gave my client the ability to simply make a “go/no-go” decision—while I did the legwork.

The Results

Replacing the property manager had an immediate and lasting impact. The new manager provided a fully digital platform, enabling the investor to download rent rolls, income statements, and bank reconciliations on demand. Tenants could pay rent online, submit work orders via portal, and track responses—leading to greater satisfaction and fewer complaints.

Though we didn't quantify the vacancy or NOI improvements right away, the investor expressed how relieved they were to finally receive accurate, timely reporting—and to no longer waste hours following up on basic property operations.

Just as meaningful, the process surfaced something deeper. By evaluating three different managers, we uncovered market-specific risks, new rental regulations, and localized management strategies that the former manager had never even mentioned.

What began as a quiet suspicion turned into a powerful shift—not just in property performance, but in the investor's confidence. With the right team in place, they could focus on what they do best: growing their business and investing wisely.

This case reminded me that real estate is not just about the asset—it's about the systems that protect it. And when those systems are weak, even good properties underperform. But with the right guide and the right questions, a single decision can unlock lasting value.