Hiring a property management company can be quite beneficial to securing your investment and keeping the day-to-day tasks out of your hands. While it is possible to manage your own rental properties yourself, hiring a qualified property management company to do it for you should be considered. This is a very important step for someone who does not have the skills or adequate time to maintain a house.
Finding the right property manager can be a difficult task. You may not know which criteria you should judge different management firms by and knowing the right questions is half of the battle.
Finding a Property Management That Fits Your Needs
There are a many different types of property management companies. It is important to find a property manager that specializes in your area of investments. If you are looking to invest in residential properties, make sure to look for companies that specialize in that area.
A company that manages commercial properties may not be equipped to handle issues that come up with residential properties. They may not have a system in place to deal with situations that arise from regular tenants. Another important qualification to consider is to determine whether a property management company actually manages properties. You may not be able to determine the services that they offer from their name or short description, therefore it is important to call and ask prior to setting up an appointment.
How to Choose the Right Property Manager
You should consider multiple property management companies when making your decision. If you go with the first one you find, you may regret it later. Once you cover the basics and determine which companies you would like to meet with, it is important to cover all your bases.
The best way to do this is to make a list of things that you want this property manager to offer. Having a checklist to make sure your investments are secure is a great way to start.
You want to determine which company will provide you with the best services for the best price. There are a number of services that you want to make sure to include in your checklist.
How do they advertise vacancies – A reputable management company will be aggressive in their advertisements. You don’t want your property staying vacant for too long as you responsible for any vacancies.
How they show properties – The process the company uses to show properties will show how successful they will be in obtaining quality tenants
How do they screen tenants – This is important so make sure that they are using background checks. A background check can find any negative history and keep you from big losses.
How they collect past-due rent – A legitimate company will have a process in place; make sure that it sounds well planned.
- How they charge maintenance costs –You want to make sure that they will keep up with regular maintenance and to find out their processes.
- How to deal with after hour emergencies –If they don’t have a system in place why would you pay them money for their services?
- What type of accounting they offer clients –Inquire what kind of accounting services they offer. Remember that great accounting means less work for you when doing taxes.
- Fee structure –Finding a property manager for an appropriate fee shouldn’t be difficult. Typically fees will run 6-12% of the rent; however various firms may have different fee structures.
- What type of liability insurance they have –You always want to be covered in this business.
If you find yourself trying to make a difficult decision between two companies, you make sure to read the fine print on the contract. Additionally consider whether this company will help you build your real estate business beyond the properties that you already own.
Establishing a great relationship with a property management company is an important step in real estate investing and should be done with care and education.