Budget Property Managers are no good for you.
As a real estate investor, I want to get the most out of my investment. No matter what type of property I’m purchasing, I want to make sure I can do everything possible to make it a profitable one for many years to come. One of the best ways I can make sure this occurs is to hire a reputable property manager. However, when choosing a property manager, I’ve always found it best to not make a choice solely on price alone. While it’s always nice to have a property manager who will not charge me high prices each month to do an excellent job, making a choice on price alone will be a decision I’ll come to regret every time. To learn more about why the cheapest property manager is usually a bad fit, here are some suggestions based on my experiences over the years.
Property to Property Manager Ratio
When I’m in the market for a property manager, I always make it a point to look at the property to property manager ratio. By doing this, I’ll have a good idea if they have the time I believe will be necessary to give my properties and those living there the best possible service day after day. For example, if a property management company has only two or three employees, yet has far more properties than that, chances are they aren’t providing a high level of service.
Make Sure They are Well-Trained
Along with having enough time and people to service their properties properly, I also want to know quite a bit about how well the property management staff is trained. In most cases, I’ve found companies that charge unusually low fees put minimal emphasis on staff training and continuing education. By taking this approach, they fail to keep up with current legislative changes regarding rules and regulations, and also have little knowledge of current real estate market trends. So before I ever hire a property manager, I ask for specific details and proof regarding staff training.
With many the cheapest property managers, I’ve found they don’t spend very much time actually at my properties. As a result, there are almost always unexpected repairs that need to be made or clients that have concerns that have not been addressed. As a result, I will wind up spending much more money than anticipated, since the property manager in this situation will have let the property slip into disarray. So after learning a hard lesson or two along the way, I always make sure the property management firm I hire to oversee my properties has the staff available to conduct regular property inspections, and to keep me updated as to any concerns from renters, or if anything unusual or unexpected arises regarding repairs or anything else.
Perhaps more than anything, I’ve found the vast majority of property managers who charge lower fees often have very high vacancy rates with their properties. This is never good, since I’ve invested lots of money in my properties, and the only way I’ll make money is if they have tenants who are renting them month after month. Therefore, I always ask to see their vacancy rates on properties before making a final decision. After all, even if I’m paying low fees for property management services, if my properties are empty, I’m still losing money.
Beware of Overpriced Extra Services
Whether you’ve been a consumer or businessperson, you’ve always been told you get what you pay for. I’ve found this to be especially true with property management, and often while the firm may charge low property management fees, chances are they’ll try to make up for it somewhere else. Thus, always beware of overpriced extra services the property manager will supposedly be offering. From collecting rent to making service calls or cleaning up a property once a tenant leaves, I’ve been bitten once or twice along the way by these tactics. To ensure this doesn’t happen again, I always ask for a very detailed list of services that will be provided within the monthly property management fee, and also a list of any extra services provided, including their costs as well. By doing this, I can avoid any unexpected and unpleasant surprises.
Like anything else in life, you tend to do better as you gain wisdom over the years. I’ve found this to be very true with real estate investing, especially where it concerns picking a property manager. Whether you’re a novice or a seasoned pro such as myself, never take anything for granted when choosing the best property manager for your needs.
This post is a guest post provided by one of our Property Owners that asked if they could remain unnamed. We do want to thank the unnamed Property Owner for taking the time.
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