Property Management Nightmare - Closing The Gap On Service Quality?
Don't work in RE but I'm dealing with a disaster of a Property Mgmt where I live and started to wonder about the tiers of Property Mgmt firms. They are one of those owner/mgmt combos.
They've been around since pre-2008 era and have a sizable portfolio small apartment buildings and small commercial buildings. Think they got lucky couple decades ago in a buying things up cheap in a market that's getting hotter and now just happen to own enough properties and have some staying power for being "local".
Unfortunately they are utterly incompetent and consistently get tenants into lose-lose situations when they need to think outside standard operating procedures. Horrible communication, poor attention to detail, general apathy towards tenants when it comes to actual problems they have.
It's insane - inflexible lease negotiation, like they don't understand basics like slightly lower rent for longer time period landing at more competitive months will probably make them more money while saving time and bringing stability for tenants; utterly insane handling of tenant requests to a point where they neglect memos from plumbers about things that can blow up; and worst of them all delayed handling of everything, which wastes tenants' times and creates legal risk for themselves.
I didn't know such a bad quality service could exist. Now I'm starting to think why this "opportunity" hasn't been gapped yet by more sophisticated players. Looking to hear some thoughts from people who work in the industry.
Like how often does this happen? What prevents people from easily closing the gap? What prevents from this specific property management from doing better in face of competition?
If anyone here specializes in filling such gaps, I will gladly talk to you.
This problem exists partially because there are bad property managers, bad regional managers, bad property management company owners, and bad owners and partially because if your property manager is any good, in 3-5 years they will not be a property manager anymore.
It is a thankless job where nothing you do is every good enough and in the snap of a finger you might be moved from one property to another on the entire other side of the city. The industry Peter Principals itself regularly—excellent property managers get promoted to regional not because they're big-picture strategic thinkers but because they're good on-site—and the more the smart ones learn about the GP or the LP side the more they wonder why they spend their days listening to moronic tenants bitch at them and shady prospects try to scam them instead of getting a degree and moving to asset management or something.
The real solution is to run a property like a high end hotel by training the entire staff in service from top to bottom, but that involves so much effort compared to just hiring Greystar that almost no one does it.
You see I just find that really strange. I'm not expecting to be treated like a king. Just asking for some quick and easy handling of things with no surprises where they do the right thing before a tenant even asks for them.
Like if I ask them to fix some issue and when they come and they discover another issue, they could just inform me of those. The management at my current place is abysmal to a point where they keep delaying things to a point they keep digging themselves in a bigger hole. It's just gross negligence.
Nowadays, you can vibe code better software systems so it's kind of ridiculous.
I've lived in buildings where the owner is some like ex-RE guy fro ma reputable shop and they just hire one manager who an handle like every thread quickly and effectively and is always willing to negotiate. Kind of an asshole but at least he handled things quickly. That's honestly all I need. Just makes no sense why they don't do this.
FYI, I've spend months trying to get them to fix something basic. I started out nicely then pivoted to yelling citing laws and regulations. We're slowly making progress but every other email I get is an absolute moronic way of handling things to a point I started to just tell them what to do. And they actually started following it. I'm starting to think they should just pay me for giving them a consultation on how to avoid legal risks.
Realistically I think I only lost like a whole day out of the whole year but it's still incredibly frustrating.
Sounds like your building just has a shit team. Like I said, it happens more than you think.
Hard to say specifically in your case but I'll go ahead and take a stab at a few of these:
Most people on-site staff have either had most decision making taken away, or taught to treat everyone the same due to fair housing concerns. Usually a combination of both.
A tenant is good until they aren't. If it's some SFH this can work, but if it's a 300 unit complex you're just a line on a rent roll.
You need to think more in the terms of the real estate industry and not other industries. How would someone come in and close the gap when it comes to an owner managed situation? Short of building a $50 million property right next to the one you own, there's nothing an outside company could really do. It's not like they would give up management to a third party, the other management company don't have their keen business insight and that's giving away $5,000-$10,000 a month not including a bunch of other perks. It's nearly impossible to fail as owner managed unless you fully ripped variable rate, max cash out refis in 2021, or your partnership(s) implode.
Now why does it happen? Usually ownership and rarely the teams below them. Ownership probably sees occupancy is at 96% and doesn't care that much. Or they're more focused on some other property that is having issues. Occasionally it's a property manager who is playing some shell game and the house of cards hasn't fallen down yet.
All really good points
Yes good point. But you see that's where I think the opportunities come from because it's kind of ripe for disruption. I've been "forced" to analyze what the foundational issues are from specific glitches and messy features in the software they use, general feeling amongst tenants for the specific category I'm in, operational issues wrt to how they treat their communication, etc...
That means plenty of opportunities in a few verticals. First in the software side - I actually think this is being filled quickly with EliseAI, which I'm starting to realize would have really solved 90% of my problems if my PM was using it (maybe I should pitch them lol).
Second, young entrepreneurial owners deciding to trim the fat and slightly upgrade the experience - you know a whole website showing their properties, super flexible leases, targeting specific tenant groups, locking them in to their boutique ecosystem (ie. want a better place and service, we also offer that! or want to live in a different environment? we also offer that!). I think players like this stand to cut the fat significantly while minimizing vacancies and keeping the rent slightly lower than they are currently charging now.
I've actually seen this happen in a different city and it's basically managed by like 3 people - owner and 2 on-site managers and they run like 30 properties with 10+ units (all 3+ bedrooms too). I used to live in their buildings and it was a spectacular experience - every email gets a response in 1 hour and every request gets filled by next day, lease terms are flexible (you can go longer or shorter than 12 months), always willing to negotiate, utilities all paid for, all tenants are screened (usually their LinkedIn)
Meanwhile my current living situation has the landlord/PM managing less properties with 10+ units, most of which are 1-2 beds and they must be have like 20ish employees in total. They also have close to 0 tenant screening - Most tenants have just self-selected because of the price of living + the neighborhood. Their tactics for price discovery is also absolute garbage and most units they have available will stay out in the market for 30+ days. I've seen similar quality properties with similar price range for the rent I pay (I had to negotiate at down to market level and they were pretty desparate to fill in the vacancy) have lines of people wanting to get in.
The point is it could literally take a few smart entrepreneurial persons who want equity or revenue sharing to come in and just clean up the whole org and communication. That's pretty much all it takes. So this gap could be easily filled. Hell I might as well as find that person myself and ask for a finder's fee.
I don't know what they're using, but it's probably more of a bad software setup and/or the person over it doesn't know what they're doing or care. Which no package can really overcome. EliseAI has it's own flaws and it's not exactly cheap either. It's not an actual PMS, it's a CRM. So you have to get Onesite, Yardi, or Entrata and then get EliseAI on top of it.
This is in almost every software package you can get nowadays. Onesite, Yardi, Entrata, buildium, appfolio, etc all have this as a standard package. There are hundreds of smaller ones that I don't even know about since I do larger multifamily.
Seems like someone who actually knows what they're doing, but this is an extreme rarity. To the point it's more likely that there are more people behind the scenes that you didn't know about.
It does sound like someone could probably come in and clean things up but if the owner really wanted that they would hire someone for like... $120,000/yr. Not handing out equity or revenue. As you said in your own post, all they needed to do was just lower their rent and you moved in. Doesn't take a state of the art platform to do that.
Oh yeah, and if they do hire someone for $120,000/yr and they just reduce the rent and fill up occupancy, the owner will probably say I could have done that then fire them.
You probably are training them. Why wouldn't you be? You have a specific set of asks, a way of doing things. That is new to them. Of course you're training them, and of course they won't get it right at first.
Lol, another person who thinks software is the solution to property management issues. Newsflash: it isn't. If you think you've "analyzed" the foundational issues in property management and the solution is "AI" then you didn't think hard or long enough. The pain points in property management are interpersonal, not technological.
It was spectacular for you. How much of a premium did you pay? How much money did the actual property manager make? At the end of the day there is an underlying business and offering lots of flexibility on terms, paying for utilities, etc isn't always good for the bottom line.
Whenever you come up with an answer such as this, that boils down to "a smart person could fix this in a week!" you should probably ask why that hasn't happened yet.
Idk why you sound so angry. Maybe you're trying to get me to say more but I don't think there's any secrets to operating models so I'll share them anyways.
All communication amongst tenants, contractors, PMs, and landlords are pretty straightforward. It's either someone asking for something or someone sending notes on what they did and observed. They usually involve checking the lease terms + local/federal laws and regulations to make sure things are done the right way & referencing past communication correctly.
So most problems just come from not being thorough or opaqueness leading to something going wrong in communication. All of this easily fixable with AI agents nowadays as long as the data they put is correct. Just gotta make sure that everyone involved sees the same information when it is relevant. It's not rocket science.
I just happened to notice the software they use doesn't actually send notifications on everything relevant. Which makes product managers at the company that built it really really dumb.
Generally a great software just puts users on a path where they have to cover all basis. It just prompts enough questions to make sure all basis all covered. Really not that complicated and doesn't require lot of soft skills. Honestly I've been doing some research on Elise AI and how they're moving into healthcare market and it makes perfect sense - they have very similar problems in that space wrt communication as in real estate.
Lot of people kept staying in-network just upgraded as they started to make more money or got a different life situation.
As for the premium? If you subtract the costs for furnishing, in-unit laundry, and utility bills being included - the prices were probably around in the 50th-75th percentile in the region. So honestly pretty great if you just want to live there fore couple years and go somewhere else. I spent 4 years in the same place and it was pretty great. At least half the tenants must've been there for 2-3 years as well.
That being said, I think during COVID, the cleaning people started to come a little less frequent and they started letting in some lower quality tenants because the rent market crashed. But no problems besides that.
Ofc the grass is always greener somewhere else so I had complaints about how pushy they were. But they were very competent people. The on-site person and the manager visited the property during move-in days to walk around meeting people asking if everything is ok too. So that's always a nice touch.
I mean they could just tell everyone to send all communication through him and run it through AI to summarize and respond to everything within a day. It's really not that complicated. It's not like they see ton of requests each day either.
Some people still live in the 1920s man.
Yeah, I get why that’s frustrating, it’s a lot more common than people expect, especially with long-established property management firms.
A lot of older companies didn’t necessarily “miss” something, they just grew in a different era and built processes around stability and risk control. That can sometimes come across as rigid or slow in day-to-day situations, especially when tenants need quicker, more flexible responses.
The gap tends to stick around because property management is a tough balance, keeping owners happy, managing liability, coordinating contractors, and handling a high volume of requests across different buildings. When things get busy, firms often default to standard procedures because they’re predictable and scalable.
At the same time, newer approaches in the industry are definitely pushing things forward, especially around communication, response times, and tech-enabled workflows. It’s just not always evenly adopted across the board yet, so you end up seeing a mix of experiences depending on the firm.
So what you’re experiencing isn’t unusual, it’s more about variation in how different companies evolved rather than a clear “good vs bad” divide.
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