Owning and operating a rental property involves significant work. Becoming a landlord is not so simple as sitting back and collecting rent payments. Being an investment rental owner means handling maintenance, tenant issues, DIY home improvements and other issues associated with owning property. Acting as a landlord is a huge investment of time. Many property owners often choose to partner with a good property management company to step in to help with the day-to-day property issues. Considering hiring a property management company? Read on to learn about nine traits to look for when reaching prospective property management partners.
Do They Have Local Experience?
Working with a local is an owner's best bet. Experience matters, but property managers who know the area, the contractors, and are familiar with other resources will be more apt to do their job well. For instance, they'll likely have a good network of professional contacts in the event of emergency repairs or other events and know local contractors who price fairly and competitively. Also, it's best to hire someone well-acquainted with the local rental market so they can confidently market the owner's rental units or homes when it comes time to find new tenants.
Do They Have Specialized Experience?
Not only should property managers have local experience, but specialized experience is also essential. Any property manager being considered should have a thorough understanding of current federal, state, and local laws. They should also have experience with the type of rental property they'd be managing. For instance, a company that primarily works with commercial businesses wouldn't be as well-suited to manage residencies, and a manager that works with a handful of single-family homes or manages a rental property here and there as a side gig is likely not equipped or experienced enough to work with a large apartment building.
Do They Have Good Communication Skills?
Owners want to go with a manager with strong communication skills to receive the best ROI on investment properties. Serving as a landlord means they'll be working closely with tenants, and they must know how to communicate with tenants and meet their needs effectively. Additionally, it's essential the property manager routinely communicates with the owner. No property owner wants to be consistently in the dark about what's happening with their rentals or the tenants renting them.
Do They Have Positive Reviews and References?
When seeking out a good property management company, it's important to conduct due diligence like any other professional considered for hire. Before contacting any companies, thoroughly read through online reviews – Yelp and Google are good places to start. Then check out social media pages and the Better Business Bureau website to see if any significant complaints have been lodged. While reading online reviews, look for patterns, because current or former tenants may be angry at a situation, so an odd review here or there may not adequately reflect the company's quality of work. If there are many complaints, it may mean the company isn't adequately equipped to handle complaints or repairs. Ideally, owners want to speak to other clients or tenants to see if they are happy with the management abilities.
Do They Have a Proven Track Record for Filling Vacancies?
The last issue a property owner wants to deal with is consistent vacant rentals, since this means no money is coming in. When interviewing candidates to manage a property, owners should examine the company's track record for filling vacant units. Do they know how to market units successfully? Do they price competitively and still have a knack for filling vacancies? Ask candidates what their strategies are and how they plan to keep the property occupied.
Do They Have a Strong Tenant Screening Process?
Owners want to fill their properties with good tenants. An experienced and professional management company will have a strong process in place for screening tenants. Filling units with bad tenants is something to avoid at all costs. Potential tenants who have a poor track record of paying their bills or a history of disorderly conduct or destroying property can lead to devaluing the property or causing issues for other good tenants. Learn as much as possible about the manager's vetting process of how they select tenants.
Do They Have Effective Rent Collection Methods?
The goal of owning an investment property is to collect consistent rent. The company chosen to fulfill this task should have a history of collecting rents on time without conflict. Important questions include how they determine rental rates, how often rents are raised, how rent is collected, and how they deal with bounced checks or delinquent payments. Another issue to discuss with a potential company is how they deal with evictions. The ideal partner is firm, but reasonable, as life happens sometimes. However, they should know how to identify tenants who might be taking advantage and pushing the proverbial envelope when paying rent in full and on time.
Do They Have Proper Licenses and Insurance?
Any potential partner should be properly licensed, such as having a broker's license. Always be sure to ask for documentation and scrutinize these documents. Ask to see professional credentials, continuing education, and other documentation to show they know their field well, understand the laws and other technicalities, and properly manage rental homes, condos, apartments, or other dwellings.
Professional companies carry insurance to cover their business, clients, tenants, and the properties they manage. This includes the following type of insurance coverages: general liability, Errors and Omissions (or E & O), workers' comp, health, and tenant discrimination. Property managers should also encourage or require tenants to carry their own renter's insurance to ensure their belongings are protected, since their landlord's insurance doesn't cover this.
Do They Have Competitively Priced Fees?
Finally, ask what the company's fees are and then compare them to market value. Look over the contract carefully to ensure it's thorough, and all fees are explained in detail. Look at and interview/compare at least three to four companies. Even if the first one vetted looks good, comparing services offered and prices can't hurt.
Are They the Right Property Management Company for You?
To succeed with a real estate investment, choosing the right property manager can differentiate between a successful experience and a poor one. Even a company that fits all nine of these traits may not be ideal for your specific needs. Be sure to have a clear vision of your goals before hiring a property manager.
The Ashton Real Estate Group of RE/MAX Advantage
The #1 Real Estate Team in Tennessee and #2 RE/MAX team in the World!