Why Property Management Reviews Don’t Say Much

For residential property owners, a trustworthy property management firm can be difficult to find, especially when cases of property management fraud are on the rise this cycle. Aside from running an in-house property management department to look over assets, owners might rely on online research to find a quality company. However, that can be an issue. Online reviews are often left by tenants, not property owners, and tenants and owners, have a different set of interests. As a result, reading online reviews might not be the best way to vet a potential property management firm.

“I always recommend looking a property manager online and reading about them, but here is the problem: a lot of negative reviews online for property managers are posted by tenants,” Jason Hartman, president of Platinum Properties, tells GlobeSt.com. “Although property managers work for the owner and the owner is their client, they also work with the tenant. If the property manager is too strict with the tenant, the tenant will write negative reviews online. The tenant is really the opposing party to the owner; they have a different set of interests. These interests are out of alignment. Even the most well-meaning manager is caught in the middle. They don’t want the tenant to get mad at them, but they are technically working for the owner.”

Hartman has reviewed several property management fraud cases, and generally believes that the best method is developing an in-house property management team. One company meant to service tenants and landlords, he believes, creates a conflict of interest. “Property managers are in a unique position. Property managers have an inherent conflict of interest,” says Hartman. “In a legal case, you couldn’t have the same legal team representing both sides. It would be considered an inherent conflict of interest. That is really a difficulty.”

In commercial real estate, property management is often kept in-house, but in residential real estate, including multifamily, owners often hire a separate company. Hartman, however, thinks that is a mistake. “In commercial property management, often times you are dealing with the owner, but they have property management people on staff,” he says. “That is what I am really recommending for residential owners as well.”

For owners that don’t have the option of bringing property management in-house, he says: “Get a referral, do online research and ask some good questions.”