What Is Property Management?
Property management is the daily oversight of residential, commercial, or industrial real estate by a third-party contractor. Generally, property managers take responsibility for day-to-day repairs and ongoing maintenance, security, and upkeep of properties. They usually work for the owners of investment properties such as apartment and condominium complexes, private home communities, shopping centers, and industrial parks.
HOW TO CHOOSE THE RIGHT PROPERTY MANAGER FOR MULTIFAMILY PROPERTY
Check Their Qualifications
There are certain requirements that rental management services must comply with. They vary from state to state so check with the National Property Management Association to find out what the rules are where you live.
No matter where you live, the management company must be licensed real estate agents because they’re acting on your behalf to lease and manage your rental property. Ask each candidate which licenses and certifications they hold (requirements vary locally and by state) and then verify them. For example, you can check with the state real estate commission to find out if a property manager’s real estate broker’s license is current.
Their main roles are to manage routine tasks delegated to them by the owners and to preserve the value of the properties they manage while generating income. It becomes much easier for a landlord maintaining a portfolio of properties if he has the help and support of a property manager. By paying a certain percentage of monthly rent, you can become free from the stress and worries of looking after your property and the tenants.
Ask For References
It’s your job to ask for references. Don’t be afraid to call up other landlords who are currently working with the property management company you’re considering hiring. Ask the landlord what types of services the management company provides to them.
Check to see if they’ve had any issues or problems with the management company and if so, how these problems and issues were handled. The more you know what you’re getting into, the more likely it is you’ll hire the best property manager.
Focus on communication and organization
Two of the most crucial skills a property manager can bring to the table are strong communication and organizational skills. Look for someone who understands the importance of clear, ongoing communication, and who will keep you updated as well as communicate well with your tenants.
Organizational skills are also important because managing a property involves keeping a lot of spinning plates in the air. Look for a property manager who can keep detailed records, and stay on top of maintenance and tenant complaints.
Low Vacancy Rates
You want to hire a property manager who keeps tenants happy enough to stay year after year. Make sure you don’t hire a company with long vacancy times between tenants. Ask the company how fast they are usually able to get properties on the market. If the company has a great vacancy rate, they’ll be more than happy to share this information with you.
Strong Policies
You should always work with others who share the same morals and values as you. And the policies a management company makes will tell you a lot about what they value. A well-run company already has good processes and efficient systems in place.
Find out what their policies and systems are so you get a good idea about how they operate on a daily basis. The more a company or manager stays on top of issues, the less likely problems will escalate into expensive hassles.
A Large Client Base
A property manager with no clients either has no record of success or a poor record of success. Either way, if your property manager doesn’t have references, it doesn’t mean it’s because they’re overqualified. Managers or management companies with large client bases mean they’re well-connected to local vendors. It also
means they have a lot of experience and are highly regarded within the local community.
Great Customer Service
It doesn’t matter what industry you’re in, customer service should be a top priority. Property managers shouldn’t just be able to provide your tenants with consistently good customer service, but they should be able to offer you reliable and professional customer service as well.
If you notice they take too long to respond to requests or are less than professional, keep searching for a better option. You also need to make sure that the property management company is willing to serve both you and your tenants 24/7.
Transparent Contracts
Before you sign any contract, always read it through carefully to make sure you fully understand the terms. You may even want your attorney to look it over to make sure it’s a good deal for both you and the property management company.
The agreement should outline the business relationship between you and the property manager. It should also list the team’s tasks and responsibilities. A typical agreement should cover the types of services provided and a list of the fees associated with those services. Typical services include maintenance, marketing and filling vacancies, resolving tenant needs and requests, handling move-outs and evictions, and daily operational duties.
Insurance
It is important to always confirm the property manager/company has the correct type of insurance such as General Liability, Property-casualty, or Errors and omissions (E&O). You may also be asked by your property management company to obtain insurance. Complying with this request will only benefit you in case something happens.
As informed investors we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.
