Appointing a different property management agency for different investment properties can be a strategy employed by investors for a number of reasons.
It could be as simple as leveraging local expertise or managing properties in different geographical areas. Some landlords are also concerned about the churn of property management staff and wish to diversify to minimise any decrease in service quality.
Here are the pros and cons of using different agencies for different properties:
Pros:
- Localised expertise.
Different property managers may have specialised knowledge about the specific markets where your properties are located. This can be particularly beneficial if you properties span diverse areas with unique selling features, tenant 
demographics or market conditions.
- Diversification of Service Quality.
By using different managers, you can mitigate the risk of uniformly poor service. If one manager underperforms, it doesn’t affect all of your properties. This can be seen as a way to hedge your bets on management quality.
- Manage Risk of Staff Turnover.
It is no secret that the turnover statistics for property managers is frightening – with the average property manager lasting just 11 months in one role and 1 out of every 3 choosing to leave the industry altogether. Diversifying your portfolio can help mitigate the risk similarly to service quality – helping you hedge your bets.
- Customised Services.
Different managers may offer varying levels of service of specialisation (ie. luxury properties, affordable housing etc). this allows you to match your property with a manager who is best suited to its particular needs.
- Competitive Pricing.
Having multiple managers can give you leverage to negotiate fees, as you can compare costs and services more directly. This could potentially lead to cost savings or better service terms.
- Innovative Practices.
Different managers might employ varied strategies for marketing, tenant retention and property maintenance. This can provide you with insights into effective practices that you can leverage across your portfolio.
Cons
- Complex Coordination.
Working with multiple property managers can complicate communication and oversight and may require more effort, especially if you’re trying to maintain a consistent level of service or operational procedures across properties.
- Inconsistent Service Levels.
While diversification can mitigate risks, it can also lead to uneven quality of management across your properties. This inconsistency can affect your overall investment performance and tenant satisfaction. What’s more, a property manager may be more compelled to give you a more superior experience if they’re aware their agency represents multiple properties on your behalf, ie “the VIP treatment”.
- Increased Oversight Required.
You may need to spend more time and resources overseeing multiple relationships and ensuring that each property manager is meeting your expectations. This can be particularly challenging if the property managers have very different operating styles or standards.
- Potentially Higher Costs.
Some property management agencies offer discounts for managing multip9le properties. By spreading your portfolio across different managers, you might miss out on discounts, potentially leading to higher overall management fees.
- Branding and Tenant Experience.
If you’re aiming to create a consistent brand or tenant experience across your properties, using different property managers can make this challenging. Each manager might have different approaches to tenant engagement, marketing and property maintenance, making it difficult to achieve a unified brand identity.
The decision to use different property managers for different properties should be weighed carefully against your investment goals, the geographic distribution of your properties and your capacity to manage multiple professional relationships. For some investors the benefits of localised expertise and service diversification outweighs the downsides of increased complexity and oversight. For others, the simplicity and consistency of using a single agency might be preferable.
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