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Should Investors Consider Yelp Ratings When Hiring A Property Manager?

I just got back from a regional property management conference in Las Vegas which was sponsored by NARPM (National Association of Residential Property Managers). NARPM has yearly national conferences and several regional events for property managers. This conference was specifically held for broker/owners of property management companies (not employees or staff). One of the speakers was an employee of Yelp, a popular online website that allows users to provide feedback for company services. With the rise of social media sites and online tools, Yelp has evolved as a popular online tool. However, Yelp and its procedures raised quite a bit of controversy amongst property managers attending the conference.

We provide a very unique service. We are hired by owners to lease and manage their properties. It is our responsibility to find qualified tenants, collect rents, and manage repairs and any issues with the property. Property owners are our clients, and as licensed real estate agents, we have a fiduciary relationship to our property owners. Our signed management agreements require us to process rents, draft lease agreements, disburse owner funds, and establish specific policies and procedures that benefit our property owners.

However, we have a customer relationship with tenants. It is our job to be professional and fair and manage repairs in a timely manner. We strive to provide professional service for both our tenants and our property owners. Yet tenants have far different expectations than property owners, and this is where the feedback issues arise.

Some property managers attempt to solicit positive feedback when outstanding service is provided. The Yelp employee discouraged owners from soliciting positive feedback. Yelp has a powerful screening tool and will hide feedback entries. Yelp will screen non customer feedback to show a more accurate snap shot of the service provided by the company. But, like junk email filters, many positive feedback entries are removed from feedback system, and junk email filters move valid customer emails to the junk folder. It is not a perfect science. Some managers claimed the negative feedback entries were permitted and the positive feedback entries were screened. Many property managers felt they were in a lose-lose scenario.

Unlike a restaurant, retailer, sole proprietor, or service provider, our end users do not hire us. We are hired by owners. Yet tenants are the retail users of the property and services we provide. Owners expect us to minimize vacancy costs and expenses. Yet tenants want full refunds of their security deposits and don’t want to pay late fees when paying late. They expect service calls to be completed within hours and want to be placed in hotels if the a/c system can’t be repaired the same day during the hot months of the summer. This is just a short list of the expectations we face daily with tenants.

So by doing our jobs and making fair and reasonable decisions that are consistent with our policies and procedures and Texas law, we have disgruntled tenants who are upset with our services who enter negative comments into websites such as Yelp. Tenants provide one sided comments that sometimes are inaccurate and unsubstantiated.

Yelp is certainly a powerful tool and will continue to grow in popularity. More and more consumers are using online ratings to research if they want to hire a person or company for their services. However, I would not recommend this as the only tool for a prospective property owner to use when considering a property manager.

I recommend using multiple tools when choosing a property manager. Referrals are one of the best metrics to use in determining the success of your relationship with a property management company. Property managers have different business philosophies and procedures. Many have years of experience, multiple designations, and an efficient system in place. Make sure you choose a property manager that has the tools, services, and procedures to fit your needs. Low vacancy rates, fast lease times, timeliness of owner ACH disbursements, easy access to owner online reporting, effective property marketing, responsiveness, structure of business (office, employees, no employees) and professional service are just a few items that should be discussed when interviewing a property manager.

In summary, be cautious of using just one screening tool such as Yelp, Google and other online rating systems in your search for a property manager. Don’t shy away if you see a property manager with a poor rating. Instead look at the context of the feedback and manager responses. Some of the best property managers in the industry have low ratings, because they have made prudent decisions on behalf of their clients, the property owner.

If you have any questions, please call us at 512-257-9836. Our office provides sales, leasing, property management, and mortgage services.

Posted by: smartsourcerealty on April 7, 2013
Posted in: Uncategorized