After many personal experiences – good and bad –hiring property management companies and managing properties on our own, we’ve figured out some key elements to keep in mind when choosing a property management company. Here are four that we think lead to a successful business partnership.
It may seem like a cliché to put integrity on the top of the list; however, a property manager’s decisions and actions have an effect on the property owner’s profit. Tracing the actions and decisions that result in a lower return on investment after the fact is difficult.Therefore, integrity is the most important component to look for from the onset. The best way to find out whether the property manager in question is reputable to use the following tools:
• Have a face to face meeting to get a sense of the person or team and their attitude.
• Check references from current property owners who entrust their property to the property manager.
• Check the Better Business Bureau for complaints.
• Check the Real Estate Commission for complaints.
In order for a landlord to be truly hands-off it is essential to hire a property manager he or she can trust. The property manager must be someone who will not only collect rent, but also handle day-to-day maintenance in a timely and responsible manner and maintain a good relationship with tenants. This isn’t just a matter of peace of mind, this also translates to profitability because consistently attracting and retaining tenants means lower vacancies.
The best way to quickly rent out properties is through excellent marketing. The easiest way to check that a property manager is marketing effectively is by looking at their current listings. Here are some points to consider:
• Check where their current listings are advertised. The best property managers market in multiple places – not just on the Multiple Listing Service.
• Quality of photos for listings are key to getting tenants to respond to ads. Check the quality of photos the management company uses. Ask if professional photography is part of their service.
• Does the property manager take their time to write up an appealing description of the listings? A listing description that allows tenants to visualize their lifestyle in the property is more likely to garner contacts.
• How are the phone calls and other communications of potential tenants handled? By extension how does the property manager handle showings to potential clients? These aspects vary, but it’s important to know the procedure in advance so that you can decide whether the process is something you are satisfied with.
This is divided into two categories:
Check the current lease template the management company uses. Do you agree with their terms and are you able to adjust those with which you do not? Keep in mind, some aspects of leasing are subject to laws and regulations, which are not negotiable.
Review the contract including termination clause, management fee percentage, etc. and, if needed, negotiate up front. If your research has led you to find two companies you would trust to use, their contracts may be a key factor of whom to choose.
How a property manager handles maintenance issues is the last aspect listed. However, it is a critical point to analyze. Whether their process works for a property owner is not only a matter of maintaining a good working relationship, but a major aspect of profitability for the owner. Some management companies charge an additional percent to manage maintenance work, while others have on-staff handymen/women. The way a property management company handles maintenance has a big influence on tenant satisfaction. Many tenants enjoy renting as a way of avoiding the hassles of maintenance responsibilities of ownership; a property manager who effectively carries that responsibility for both the tenant and the owner is an excellent choice.
All in all, good property managers don't just provide a peace of mind, they are an ally in establishing and maintaining profitability as well. As with most investments, a cost-benefit analysis can be applied to choosing a property manager. If the chosen property manager’s cost is outweighed by the ability to maintain your peace of mind and your bottom line, you’re probably making the right decision.