I was scrolling through one of the countless Philadelphia real estate investing groups on Facebook this morning, and I came across a post that got my attention. Somebody asked a simple question: are there any property management companies in Philadelphia they could use? And the responses were… concerning.
A whole bunch of people jumped into the comments saying, “Hey, I’ll do it. I’ll manage your property.” And here’s the problem — I don’t think most of those folks have any idea that property management is a licensed activity in Pennsylvania. What they’re offering to do is, frankly, illegal.
Property Management Is a Licensed Activity
Let me put this in perspective. Being a doctor is a licensed activity. Being an attorney is a licensed activity. I can give a friend legal advice all day long (and I’m not an attorney, so don’t take my advice as legal advice). I can tell a buddy what vitamins I’m taking and how great they are. That’s fine.
But the second I take money for legal advice, or charge somebody to tell them what supplements to take as a medical recommendation — now I’m practicing without a license. The repercussions would be considerable.
Property management works the exact same way. You can tell your friend how to manage his rental property. You can walk him through screening tenants, handling repairs, all of it. You just can’t take money for it unless you’re licensed to do so. In Pennsylvania, property management falls under real estate brokerage, which means a license is required.
Why This Should Scare Rental Property Owners
I’m not bringing this up because I feel threatened by competition. The property in that Facebook post probably wasn’t even in an area my company services. My concern is for the rental property owners who don’t know what they don’t know.
If you hire an unlicensed property management company in Philadelphia, here’s what you’re actually signing up for:
- No real experience or systems. A contractor who decides to start “managing properties” on the side doesn’t have the mechanisms in place to do this correctly. They can’t compete with what an established property management company provides.
- Exposure when the state steps in. There are actual governmental offices whose entire job is to track down unlicensed activity and shut it down. When disciplinary action happens, the repercussions don’t just fall on the unlicensed manager — they can fall on you as the property owner too.
- Legal landmines you don’t even see coming. There are a great many laws that have to be followed when dealing with tenants in Philadelphia — fair housing, security deposit handling, lead disclosures, the rental license itself. An unlicensed manager probably doesn’t know those laws exist. And when they screw it up, you’re the one holding the bag.
The Folks Volunteering on Facebook Probably Don’t Know They’re Breaking the Law
That’s actually the most disconcerting part. The people in those comment threads saying “I’ll do it” almost certainly don’t realize property management is a licensed activity. They think it’s easy. Collect rent, call a plumber when something breaks, how hard could it be?
Very hard, actually. And if they don’t even know the licensing law exists, what other laws are they unaware of? The Philadelphia rental license requirements? The rent suitability certificate? Security deposit limits? Just cause eviction rules? The list goes on.
How to Actually Vet a Property Management Company
If you’re shopping for a property management company in Philadelphia, posting on Facebook and grabbing whoever responds first is not the move. Here’s how I’d approach it — and this is the same process I use as a property management company owner when I’m vetting contractors we refer out to clients:
Start With Google Reviews
This is the obvious first step. Go read the reviews. Read all of them, not just the star rating. You’ll learn more in 15 minutes of reading reviews than you will in any sales pitch.
Confirm They’re Actually Licensed
In Pennsylvania, you can verify a real estate license through the state. If a property manager can’t show you a license or point you to one, walk away. There are no exceptions to this rule.
Ask About Their Systems
An established property management company has systems for rent collection, maintenance requests, tenant screening, accounting, and legal compliance. If they can’t clearly explain how they handle each of those things, they’re not ready to manage your asset. For more on what to look for, here’s a deeper dive on how to find a good property management company in Philadelphia.
Bottom Line
I would be extremely hesitant to pay someone to manage my rental property if they weren’t licensed to do it. You’re not saving money by going with the cheapest option on a Facebook thread — you’re taking on risk you probably can’t even quantify yet.
Property management looks easy from the outside. It’s not. The folks who think it is are the same folks who don’t know they’re breaking the law by offering to do it for pay.
Just a humble Philadelphia property management company owner doing my best to answer your rental property investing questions. As always, happy rental property investing.
