It can be a stressful task to identify a good property manager versus an average or below-average one. Listed are four attributes of a property management company to take into consideration prior to hiring a company to manage your property.
Transparency is the cornerstone of trust. Property owners and real estate investors place huge amounts of trust in a property manager when hiring them. There have been publicized instances of property managers collecting rent and not reporting it, or charging for work that wasn’t actually performed.
The best way to reduce risk is to read all of the available reviews for the property management company you are researching. If there are only a few reviews and the company claims to have been in business for an extended period of time, be wary; because nowadays, it is of the upmost importance to delight customers in the hopes that they will become promotors of your business. Any business that does not put an emphasis on delighting its customers and clients is likely not providing exceptional value.
It’s also important to ask to speak with current and former clients to get a better understanding of the transparency of the organization. Are the prices and services clearly posted on the website or marketing materials? This is a common mistake and a red flag. Many property management companies do not have published prices; and I would avoid them for the simple fact that they cannot be treating all clients equally if prices are not consistent. (And if they are consistent, why would they not be posted?)
#2: Maintenance Capabilities
Once you find a property manager that has a proven track record of positive reviews and straightforward services and pricing, you will need to learn about the capabilities of the organization.
Maintenance is usually the biggest expense that a property owner will encounter; so it’s also the biggest potential pitfall if mismanaged. Do they have a trusted turnover vendor to get units ready for advertising quickly?
#3: Maintaining Balance
Investments under property management have three parts that all must experience a win-win-win in order to maintain an equal balance. The owner must be pleased with the communication, income and care of the home. Tenants must be treated with respect and have a safe environment to live. Property managers need to feel trusted to execute the duties of their position. If one aspect of the equation is not in sync, typically time and money are wasted. Find a property manager that will treat tenants with respect, that will communicate with owners and provide an overall excellent experience.
#4: Quality over Quantity
Property management companies come in many sizes from managing 1,000’s of units in multiple states to the Realtor who manages a handful of properties as a side business. Then there are companies that focus on a local area, have enough properties under management to have dedicated policies and procedures and focus on quality of service over the quantity of units under management.
When a property management company only works with quality homes, quality tenants and quality owners they are able to focus on the existing portfolio under management and provide excellent service, detail and attention. When an owner calls the management company, the property manager knows the owner by name is familiarized with their property and their tenant.
Companies that focus on quantity are always looking to add properties to replace the dissatisfied owners who have terminated their agreement. These management companies usually offer low management rates or low flat fees.
The quality focused company may come at an increased price but it is important to remember, you get what you pay for. Constant turnover, bad tenants and lack of organization will cost much more in the long run.