Residential real estate is a fluid industry that evolves rapidly and is prone to adaptations. Nonetheless, it is inevitable for problems to occur in this sector, this is why investors relentlessly look for effective ways to mitigate risks and navigate smoothly.
Let’s take a trip down memory lane. The Great Depression came with the rise of the caretaker manager commonly known today as a property manager. At the time, banks were almost defunct and struggled with properties with little or no idea on how to manage them. Their ineptitude was justifiable because they were money managers, not caretakers. Overtime, sweeping changes occurred in the real estate industry, and professional standards were set for property and real estate management.
Today, real estate investors and property owners are on the lookout for top producing property management companies to manage their properties. Property management companies have grown to be invaluable elements in real estate. More so,
property managers understand the property market and market conditions of different market areas of interest.
Identifying and choosing a good property management company can be a daunting task. There is a slew of options to choose from and for this reason such a decision shouldn’t be treated with levity. A good property management company will make your rental property business thrive, a bad one may lead to the possibility of a foreclosure.
In this blog post, we will examine 5 qualities every property owner should consider before hiring a property management company. Every property owner has different needs that are unique. However, there are certain qualities that good property management companies have in common.
Reliable and Trustworthy
A pertinent question to ask before considering a property management company is if they are reliable and trustworthy. No one likes to do business with people they do not trust. Before hiring a property management company, be certain they have a proven track record, good working relationships with vendors, tenants, property owners and professionals from different fields. Moreover, assess the nature of their online reputation to be sure it is positive. Most importantly, make sure they are a member of professional associations like the National Association of Residential Property Managers and check their rating with the Better Business Bureau.
A Bulletproof Business Strusture
Property owners value peace of mind, and they want to be sure their investment is safe. Building a bulletproof business structure requires planning, people, processes, positions, performance, passion, etc.
When vetting a property management company, you should have a clear picture of the company’s short and long term plans. With regard to positions, this entails the structure of the company and how it is aligned to the goals they intend to pursue. A good property manager would hire to specific roles with clearly defined goals and KPIs. Moreover, a good property manager knows the importance of working with the right people to achieve success.
Performance is about execution in different parts of a
property management company. Good property managers have a clear view of what’s important and measurable. A property manager displays passion through his/her personal conviction, they are unwavering in their commitment and are focused on setting the organization on the right course. Asking the right questions is crucial in choosing the right property management company. Beyond questions, you should endeavor to get verifiable information that substantiates the responses you get.
Management Fees
When it comes down to the money you need to be careful and thorough. Ensure that the management fees are reasonable and they do not take up a huge percentage of rental income. It’s also advisable to negotiate a fee that isn’t going to affect your profit margin. Some property managers are shrewd and it’s possible that some of the fees are tactfully mentioned in the contract. It is in your best interest to ask the property manager to list all their fees before you sign the contract.
Professional Work Experience
Hiring a professional property management company can be very complex, the reason being that there are federal, state and local laws you’d have to face. Once you have a shortlist of property management companies you’re interviewing, ask them to provide a proven record that shows how they’ll handle the variables that come with managing properties and tenants. You'd also want to find out how long they’ve been in the business, their understanding of the market area, marketing strategies and more. If possible, ask for recommendations and testimonials.
Good Property Management Companies Practice Accountability
These are a few questions you can ask to gauge a property management company’s level of accountability.
- What guarantees does the property manager offer about the quality of their work?
- What is their churn rate vs their rent out rate?
- How fast do they rent out spaces?
- What percentage of your tenants renew their lease?
These questions are important and should be asked ahead of time. You do not want to go in blindly and be taken back by unpleasant issues.
Tenant Screening Process
High quality tenants are in short supply. However, the best way to find them is through a thorough tenant screening process. It is necessary for you to ask a prospective property manager what their tenant screening process entails. Ideally it should include the following:
- Credit Checks
- Past history of Rent Payments
- Employment Status
- Tenant Eviction Report,
- Income Verification
You also want to make sure that the rental online application is fast and easy for applicants. Once you’re certain about the efficiency of the tenant screening process, rest assured you’re on the right path in hiring a good property management company.
In conclusion, there are more qualities needed to identify a
good property management company. However, the aforementioned qualities are good indicators for you to make an educated decision and choose the best property management company to meet your needs.
If you’re looking for a trustworthy, accountable, results-driven and experienced property manager. We are best placed to serve you, working with us will maximize your chances of success and ultimately give you peace of mind.
