Why Third-Party Property Management Might Save Your Entire Business
There was a point in my journey when I thought I could do it all—raise capital, close deals, and yes… manage tenants and toilets too.
Spoiler alert: I was dead wrong.
Trying to self-manage a growing portfolio while juggling other responsibilities—especially if you’re out-of-state or still holding down a W-2—is a recipe for disaster. And trust me, I’ve learned this the hard way.
That’s why this post is all about third-party property management—how to choose the right one, what red flags to look for, and how to make sure your asset is protected instead of quietly bleeding out.
If you’re serious about building a multifamily real estate empire, you’ve got to get out of the trenches and start leading from the top. Here’s how to do it.
⏱ Why Property Management Matters (Like, a Lot)
When you’re new to multifamily, it’s tempting to keep costs low by doing everything yourself. I get it. But there comes a point when your most valuable asset is no longer your cash—it’s your time.
Managing properties directly kills your scalability. You can’t be on the phone with tenants about broken blinds and on Zoom raising half a million dollars. Not if you want to win.
Unless you’re living at home with zero bills, zero kids, and zero other responsibilities, you’re going to need help. That’s where a third-party property management team comes in.
🧠 How to Vet a Property Manager (and Not Get Burned)
Before you hand over the keys to your empire, you’ve got to ask the right questions and watch for the wrong answers.
🔥 5 Critical Questions to Ask:
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How do you screen tenants?
Look for clear, consistent processes: credit score minimums, income verification, background checks, eviction history. Weak screening = bad tenants = cash flow chaos. -
What’s in your reporting package, and how often do I get it?
If they can’t walk you through monthly financials, P&Ls, rent rolls, and maintenance logs—you’re in trouble. -
How do you handle maintenance and emergencies?
24/7 systems and a proper work order process are non-negotiable. You don’t want 2 a.m. calls about leaks. -
What’s your typical unit turn cost and timeline?
A sloppy turn process can crush NOI. Ask for average costs and time to lease-up, and make sure they’re not letting units sit vacant. -
How do you help owners like me increase NOI?
Great PMs think like asset managers. They’ll suggest things like RUBS, rent bumps, and expense optimization. If they just say “we collect rent,” run.
🚩 Red Flags That Scream “Run”
Even the most polished property managers can turn into liabilities. Watch for these dealbreakers:
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Poor communication or ghosting
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Lack of transparency with billing or reports
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High turnover with no solutions
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Resistance to feedback or coaching
Remember, this isn’t their asset. It’s yours. If they’re not treating it like it matters, they’re not the one.
📄 Structuring the Relationship the Right Way
Your Property Management Agreement should clearly define:
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Monthly fees
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Termination clauses
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Scope of work
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Lease control
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Reporting frequency
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Access to their software (e.g., AppFolio, Buildium)
Bonus tip: Set weekly or monthly KPIs and review them religiously. Hold your PM accountable like any other business partner. If they miss goals, have the hard conversation. If they ghost you, move on.
💣 When It’s Time to Make a Change
Let’s say you’re seeing high turnover, rising expenses, or empty units sitting for weeks. Don’t wait until things are on fire.
Start by asking:
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What’s going on?
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What’s the plan to fix it?
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What support do you need from me?
If the PM responds with solutions, accountability, and transparency—good. You might be able to work through it.
But if they respond with excuses, defensiveness, or silence—it’s time to start interviewing replacements. Your asset’s performance is too important to let slide.
🧠 Final Thoughts: You’re Still the CEO
Hiring a property manager doesn’t mean checking out—it means leveling up.
It means:
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Thinking like an operator
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Tracking KPIs
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Staying on top of reports
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Leading the team instead of working in it
The right property manager will protect your asset and help it grow. The wrong one will silently wreck your NOI.
Choose wisely. Ask the tough questions. And never forget: you don’t build empires by managing toilets. You build empires by building systems.
📌 Quick Recap:
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Vet your PM like you’re hiring a CEO.
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Demand clear communication and transparent reporting.
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Hold them to performance metrics.
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Be ready to pivot if they’re not delivering.
If this helped you, share it with your team or someone new to the multifamily game. And if you haven’t already, grab my Multifamily Credibility Kit—it’s a free resource that’ll help you build trust with brokers and partners from day one.
Until next time—stay sharp and keep swinging that Small Axe. 🪓
-Nico
