Dan was a young investor when he started with a house hack. Over the years, he consistently bought more units and completed the BRRR strategy over and over again.
Because he was so busy working full time and doing the BRRR strategy on the side to add more units, he did not have time to manage, so he handed off his management to a company that seemed to have a lot of presence in the market.
Usually, Dan ignored his monthly statements from the PM, except to note that money was coming in. Because Dan had money flowing in and out from continual purchases and refinances, he didn’t really notice that his cash flow was going negative on his rentals.
The day finally came though that Dan got burn out on doing BRRR, and with 150 rentals he figured it was time to quit his job and live off his income.
Welp, the day of reconning came for Dan. He realized he had a mountain of debt and very little cash flow- because rents were not being raised, repair expenses were eating him alive, and vacancies were sitting open for far too long.
Dan realized even having a property manager does not mean you can just walk away and expect the properties to perform well.
Supervising and being an active owner is substantially important to make sure your investments do not end up violating the #1 rule of investing:
‘Don’t lose money!’
Here’s how to stay involved with your property manager for a great outcome:
1. Set Expectations in Writing Before Anything Else
When you hire a manager, the relationship starts with the management agreement, but don’t stop there.
Create a one-page owner’s directive that spells out your specific standards:
- How quickly vacancies must be listed
- Your target rent range
- Your threshold for maintenance approvals without prior sign-off (typically $200–$500)
- How often you expect written reports
- Your preferred communication channels and response times.
Ambiguity is where investors lose money. Be direct on expectations for better results.
2. Review Monthly Reports Like a CFO
Every month, your manager should send a profit and loss statement, a rent roll, a vacancy report, and a maintenance log. If they don’t, require it in writing. When the reports arrive, don’t just skim them — look for:
- Rents that are below current market rate for comparable units
- Vacancies sitting longer than 14–21 days without a clear explanation (depending on the time of year)
- Maintenance charges that recur on the same item (a sign of deferred repair or poor vendor quality)
- Discrepancies between funds collected and funds distributed to you
Ask questions about anything that doesn’t add up. A good manager welcomes scrutiny; a bad one deflects it.
3. Push for Rent Increases — Don’t Wait for Them
Most property managers are incentivized to keep tenants happy, not to maximize your revenue. Tenant retention is easier than re-leasing, so managers often skip rent increases to avoid friction. You need to push back on this.
At least 90 days before each lease renewal, ask your manager:
- What is the current market rent for a comparable unit in this zip code?
- What is our tenant paying?
- If there is a gap, require a written plan for closing it. Many markets support 3-5% annual increases — leaving that on the table is the same as writing a check to your tenant.
Subscribe to a local rent comp service (Rentometer, Apartments.com, Zillow Rentals, Rentcast, etc) so you can verify what the manager tells you independently.
4. Conduct Your Own Property Inspections
Your manager should be doing annual inspections and providing you with a written report and photos. But you should also walk the property yourself at least once per year, or spot check your work if you have a large number of units.
You’re looking for:
- Deferred maintenance
- Unauthorized occupants (My boyfriend and his 3 friends would be out on the street if I didn’t give them a place!)
- Lease violations (What do you mean my kids can’t ride their bikes in the laundry room?)
- Whether the property is being presented at a quality that justifies your rent. (Quality property = quality tenants)
When a unit turns over, ask for a move-out inspection report with photos before authorizing any work. Compare it against the move-in report.
This protects you from both security deposit disputes and managers who inflate repair scopes to generate vendor kickbacks.
The Bottom Line: Profit
Good news: after Dan went through the hard work of understanding his current portfolio returns, he was able to develop a plan for increasing those returns.
He hired a new manager with clear expectations, and specifically selected one that had in house maintenance crew.
Thankfully, within a 8 month period of addressing some Cap Ex projects and doing quite a few unit turns and rent increases, Dan was able to get to a stable place with $150 per unit/per month of free cash flow.
Investing in real estate should always have active participation. Even when you have a great property manager, don’t depend on them to control the future value of your property.
If you neglect repairs and fail to raise rents, the value of your property will actually degrade over time.
If you’re going to do the hard work of investing, go a little bit farther to make sure that your investment is protected.
Not only will your bottom line profit reward you for doing so but your tenants and property manager will appreciate your active participation.
Many investors we work with struggle with how to find and manage good managers and monitor their investments while also growing their portfolio. If you are looking to grow your investments and would benefit from an experienced perspective, CONTACT US to set up a complimentary property review.