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The Chicago real estate market has some of the best opportunities for investors around the world. Chicago is a world-class metro with huge finance, transportation, and agriculture hubs.
That said, if you don't know what to look out for, Chicago can also be one of the toughest cities to manage rental property for both professional property managers and self-managing landlords. Meanwhile, even though you’d think residential property management in Chicago suburbs would be easier away from the politics of the big city, they offer even more challenges.
At the end of this article, I’ll share a list of the best professional property management companies in Chicago. But first I’m giving you a view point you’ll find nowhere else when it comes to property management in our great city!
Who Owns Chicago Property Management Firms?
In most cities around the United States, you’ll find a mix of large and small property management companies. Landlords and real estate investors have a wide variety of choices available in major markets.
Prior to 2008, the average property management company had 250 doors under management. Since then, many changes have significantly boosted that average.
Large vs Small Property Management Companies
A large property management company typically has 2,000 doors or more under management with multiple locations. They may manage in multiple markets across the United States. Often these companies are subsidiaries of larger conglomerates, private equity or venture capital backed, or even some publicly traded companies.
This means small property management companies would be anything smaller than 2,000 doors. Their founders often still play a major part of the company’s day-to-day operations. You’ll hear people call these mom-and-pop operations.
How Has Property Management Changed Since 2008?
Just like about every industry, technology has had a huge impact on property management in the last 20 years. For example, technology helped enable the property management industry to have the ability to grow past its previous cap of roughly 250 doors under management. New automation tools, databases, and many rental property vendors have come into the market with solutions.
The ability to tap into global talent or virtual assistants has also played a major role. Property management in Chicago (or anywhere in the world) is high touch. It’s still very much a people-to-people business that requires a huge amount of people with specific skills as a vital resource. Global talent and increasingly more sophisticated technology have helped property managers add the people resources they need, regardless of where those resources are located.
What Makes Property Management Difficult for Chicago Landlords?
As we mentioned, Chicago can be one of the toughest markets for property management. While every property comes with its own idiosyncrasies, some common issues you’ll find unique to the Chicago market include:
- Government rules and regulations that differ per area
- Different leases depending on location
- Different ways to hold security deposit depending on location
- Different ages of housing stock
- Maintenance due to age of older housing stock
- Segregated class of neighborhoods
- Super tenant-friendly laws
- Changes of weather
Why Large Property Managers Struggle in Chicago
The birth of the larger property management companies only happened around the last 15 years. So far we’ve seen most or all of them struggle to manage property in the Chicago market.
For example, one way property management works so well is by having a streamlined process that is followed by all. Unfortunately, following one streamlined process is nearly impossible here in Chicago.
As a result, we’ve seen larger property management firms struggle to adapt. That’s because adapting usually comes at the cost of less streamlining and more exceptions to the rule, which many large property management companies cannot adapt to.
Where Large Property Managers Succeed In Chicago
Large property management companies can succeed in Chicago by having a niche in a specific part of the market. Maybe they manage solely in a specific suburb or in just a select few neighborhoods where there are fewer sets of rules to learn. This alleviates the struggle to adapt to many more differences.
Why Mom and Pop Property Managers Outperform
The smaller property management companies have boots on the ground. Their people live and network locally, so they understand upcoming changes. Plus, often the founder, who’s more invested in the company’s success, leads the ship. The ability to adapt and adjust constantly allows Chicago property management companies to keep the big guys out.
A Successful Chicago Property Manager Adapts
GC Realty & Development has been in this game for 20 years now and adapting has been one of our keys to success.
For example, we’ve adapted to having three different leases (ones for Cook County, Chicago, and all other areas). We’ve adapted to the 183 Chicago suburb rental license laws, including the numerous new laws and ordinances that come out every year. Then we adapted our process to be compliant with them all.
We got so good at adapting that we thought we had a lot of it figured out… until 2021 when the Residential Landlord and Tenant Ordinance (RLTO) for all of Cook County went into effect. So we had to adapt again.
Chicago Property Manager Qualifications
Property managers in Illinois have a very low barrier of entry into the field. To call yourself a property manager in Chicago, you don’t need any previous experience, financial security, or even written systems. You just have to be licensed as an Illinois real estate broker. To run your own property management company you must be an Illinois licensed managing broker.
Legally you cannot operate a property management company in Illinois without a license, but we see it happen all the time. The only way to operate a property management company without an Illinois real estate license would be to own 100% of the properties as the owner/operator and receive funds or handle licensed activities for third party clients.
Qualifications For Top Chicago Property Managers
Even though the barrier to entry as a property management company in Chicago is pretty low, the top Chicago property managers operate under much higher standards. These standards include:
- Tenant Screening
- Responsive to Maintenance Requests
- Time Tested Process and Systems in Place
Tenant Screening
Tenant screening comes at the top of the list because it sets the whole operation up for success. A well screened, quality tenant from a comprehensive screening process erases the potential for a lot of issues.
A word of caution: often only the top property managers are on the cutting edge of tenant screening with ways to ensure you don't get screwed. Without the proper screening, a lot of terribile stuff can happen, including stolen identity scams, incomplete or incorrect applications, and potential fines for incorrect screening in Cook County.
Responsive to Maintenance Requests
If you own rental property and are interviewing potential property managers, ask how they respond to maintenance requests. You want to know how they handle regular maintenance requests as well as emergency repairs. Ask to see how they record requests too. At a minimum they should have up-to-date records of maintenance requests, including when a request was made and when it was completed.
Being responsive to maintenance requests can help reduce conflicts between tenants and the property owner. It can also reduce the risk of any potential damage that may occur if a repair is not addressed quickly.
Chicago property managers should also be proactive when it comes to recurring maintenance. This includes regularly inspecting and cleaning common areas, such as the lobby and corridors. Doing so can help to maintain a safe and welcoming environment for tenants.
Time-Tested Process and Systems in Place
Property management companies need stronger systems than most other businesses. Why?
Because most business sectors either have a service or a product. Property management has both a product (the property) and a service (the day-to-day operations).
To make matters more complex, property managers have a service model that supports both the tenant and the property owner. Good property management companies usually specialize in supporting real estate investors. Yet without outstanding tenant services, they’ll have trouble filling those rental properties for their owner clients.
That means the best property management companies offer the same level of quality for every tenant and every owner.
Who are the Best Property Managers in Chicago?
GC Realty & Development LLC has been around for 20 years and covers 60% of the Chicagoland market. We understand how to manage A,B,C, and D Class properties, and we’re front and center on all new policies.
By networking and collaborating with other property managers, especially through our Straight Up Chicago Investor Podcast, we’ve come to know and trust the best companies in the area. So when we don’t fit someone’s needs, we can confidently recommend other great property management companies in the Chicago market.
- Chicago Style Property Management – Chicago Style has a strong focus in C & D Class areas on the west and southwest side. This firm does and goes where most other Chicago property managers won’t.
- Landmark Property Management – As an industry leader, Landmark is located in the Pilsen neighborhood, but also has a strong presence in Will County. If you need property management in Joliet, Mokena, Frankfort, New Lenox, Pilsen, or Little Village, talk to the team at Landmark.
- Marblestone Property Group – Marblestone has a strong focus on the south and southeast side of Chicago. Owner Jared Kott is often known as the Boss of the Southeast Side. In Three Things To Consider Before Investing in C Class Neighborhoods, Jared shows how he handles investors not prepared to invest in C&D Class neighborhoods in the southside of Chicago, including South Chicago, Deering, South Shore, Pullman, and Roseland.
- Concierge Property Management LTD – Serving Lake and McHenry Counties, Concierge has built a team that works great with investors. If you are looking north of Lake Cook Rd let Shannon and her team give you a pitch.
Chicago has no shortage of property management companies. Finding someone who can deliver consistent and high-quality property management over time significantly reduces your pool of options.
If you have questions about the level of quality to expect from your property management company, give us a call (630-587-7400). We’ll offer examples of what the best property management companies do for their clients. We believe everybody wins when investors do well, even if they don’t use our services. ;)
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