When you're just getting started in the real estate investing world, and you start a relationship with a new property manager, there are a few key areas that can make new investors question whether their new property management team is doing well or just out to make some money. Below I am going to explore 5 things new investors experience when they sign up with a bad property management company, and 5 things that you, as a new landlord, may experience negatively even when you hire the most successful property management company.
5 Traps New Landlords Fall For with Bad Chicago Property Management Companies
1. Financial reporting: In 2026, if a property manager does not have software that records expenses and rent collection, they are either going to be stealing from you on purpose or by accident. The software out there now is a definite requirement to run a successful property management company in 2026 and beyond. If you cannot see reporting on a regular basis, it becomes very hard to see a property's profitability, and also will make it hard when the time comes for refinancing or selling the property. Having a professional property management company that has operational efficiency to keep proper financial reporting is a great first step to make sure you are with a reputable Chicago property manager.
2. Poor tenant screening: As a southside Property manager, we decline far more applications than we approve. Unfortunately, some poor management companies do not have a refined screening process and only care about getting a tenant in so they get their commission. In today's world, having data not only on your vacancies but being able to catch fraud as it comes in using the newest technology is a vital component to finding a new potential property manager. If they put bad tenants into your apartments, it could take a year or more to get your property to cash flow again.
3. Bad leases: Real estate investors in Chicago and the surrounding Cook County areas know that tenant-landlord laws are no joke, and a good property manager needs to have a lease that keeps your properties in compliance. If you are trusting your rental property with someone you think has a team of professional property managers, but they haven't updated their lease in over a year, there is a good chance that your rental properties will not be in compliance with the city, and that could cost you a ton in the long run.
4. You hired a yes man: We all love when our partners think all of our ideas are great, but here is the reality of it, you as a property owner, are probably not in the day to day of new laws, new procedures for maintenance issues, and knowing everything about your tenants, which means that you may not always have the right answer. If your property manager is just taking your orders and never coming to you with push back or ideas of their own, there is a good chance they are setting you up for failure. Unfortunately this doesn't show right away as often property owners make a decision that makes sense for the short turn but a year later their apartment building is losing money and they are struggling to dig their way out and start to cash flow again.
5. No maintenance requests or spend: We often look for the lowest prices, but when it comes to Chicago Property management, the phrase " too good to be true " definitely comes into play. Most buildings, especially on the south side of Chicago, are 60 to 100 plus years old; the odds of there being no maintenance issues is very low, not to mention the monthly and yearly preventative maintenance that should be going on. We have taken over many times from companies that were showing no costs to the owner, and thus the out-of-town owner thought they were doing great, only to find 100 to 200k of deferred maintenance that had to be done. Not to mention the fact that tenants never stayed more than one lease term because the unit was uninhabitable or the building was not kept clean or the grass was not kept cut.
5 Things New Investors Will Have Issues With Even With Good Chicago Property Managers
1. Can't get bad tenants out quickly: If you bought a building with a bad tenant or you signed up with a management company and fell for trap number 2 above, your new property management company is going to take some time to get the building vacant again. The court systems in Chicago take up to 10 months to get an eviction executed which means that even the best management company will take some time to get your building from economically vacant to vacant. Oh and odds are these tenants will do some damage on their way out.
2. Section 8 housing transition: IL section 8 may be one of the poorest managed section 8 departments in America, and with CHA especially this could mean that it can take up to 3 months to get payments from them while we transition from the old owners or management company to our systems. Unfortunately there is no way to get on the good side or get things pushed through faster at this point it is just a waiting game.
3. Rent rates aren't what you expected: One of the biggest traps we see new landlords fall into when buying a property is they believe the list agent when they tell them well yes its rented for 800 a month now but it would be easy to raise the rent to $1500, than the owner comes to us and we give them the market rent rate at $950 and the new investor is now underwater in what they bought the property for. In this case we ask you not to shoot the messenger. A list agent job is to sell for as high as they come and some aren't honest others just don't do rentals so they don't understand the market rates. But let's think logically if a home could rent for $1500 why would a sane person only be charging $800 for it. Always buy a home for what the current owner has it rented for and if it's vacant work with the property manager you plan to hire to make sure the rents you are using in the evaluation of buying the home are correct.
4. Thinking they bought a turn key rental: First off no matter how good a management company is they can not fix a bad buy. With that being said, too often we see a new investor buy a property without getting a proper inspection and pricing to make the property meet our standards. If things are broken you want to fix them as soon as possible to make sure that we keep your good tenants, also when we look for new tenants we want your rental to look great to attract great tenants, not have stains on the carpet and peeling paint, because the only tenants that will apply will be bad tenants that can't get approved at other places. We recommend buying your property with 6 months in reserves, so when you find any issues you weren't aware of, you are in a position to make the fixes and keep the good tenants in place.
5. Not understanding the delays with our government: whether CHA or city permit process, the City of Chicago is one of the slowest moving entities you will ever deal with even an experienced property manager is going to have delays with the city whether that's getting payments in, getting permits to make fixes, or getting bad tenants out. If you go into your investment without reserves you will get squeezed out very quickly so be prepared for delays that are out of the control of the property manager.
If you are looking for your first or next investment, let's get it off to the right start by having us do a free rent analysis to make sure the rents you expect are what you can get.
