I don’t know about you, but not only did I get into real estate investing to create financial success but to create more time in my life as well. When it came to having rental properties in the portfolio I quickly found that instead of creating more time I had created another full-time job that sucked up so much time that I found myself working on the business instead of in it. Let alone the damage it did to the quality of relationships to those around me. Like many an Entrepreneur, that was a dangerous position to be in and it was more sooner than later the train wreck was going to arrive.
Well, I said to myself you can continue to do this the hard way or the easy way. The hard way being you can continue to have tenants calling you in the middle of the night or just badgering you about property issues as the laws regulating property continue to get more and more complicated on the federal, state and local level eating up even more time. Or you could hire a property manager to take care of it for you putting a much-needed buffer between myself and the tenants.
But how do you hire a management company and still make a profit? Consult with your fellow investors who have had success in hiring a management company. I can tell you we’ve gone through our share of them.
Once you have assembled a list of companies and before you call them, design a list of expectations for the property company and a list of goals for each of your rental properties. Your goals might sound something like this:
· Keep property rented
· Prepare an annual budget
· Manage a siding installation project
· Annually inspect the property and send you a report.
· Send you a monthly financial report
· Help you lease up property
Before you dial the phone, look at your list of expectations. These are the questions you can ask the property management company to see if they are a good fit. Remember to also have a property description and income and expense information available for them to be able to give you a detailed response to your questions. Your list of questions may look something like this:
· How long have you been in business? (You are looking for long-term stability.)
· How much insurance do you carry?
· Do you have experience in the kind of property I want you to manage? How much experience?
· Is your staff bonded?
· What does the bonding and your insurance cover?
· Are you accredited by a national organization?
· How do you collect the rents?
· If a tenant does not pay what do you do?
· How do you advertise vacancies?
· How do you select tenants for my property?
· How much do you charge monthly? Are there additional charges?
· What service do I get from you?
· Do you send me monthly reports?
· What is included in my monthly reports?
· How do you handle property maintenance?
· How much could the maintenance cost?
· Can I visit your office?
· Can I meet the property manager who will be directly managing my property?
· How do you handle property emergencies?
· Can you give me some example of your attention to detail?
· Tell me about some of your success stories?
· Tell me specifically how you will take care of my investment?
· Do you have references I can call?
The answers to these questions will probably give you a good idea of how the company is run and how well your property will be taken care of.
Clearly, the questions you ask will also depend on the size of the property you are planning to have managed and the results you expect. For our purposes we are talking about successfully managing a single family to smaller multi-family units (up to four units), tenant selection, screening, as well as rent collections and property maintenance are key issues.
Have confidence once you have selected your team. If you have done your due diligence you should have a qualified organization that you can consider an extension of your business and can be confident they will follow the law and abide by a code of ethics. It’s an important choice so don’t be afraid to interview many companies to find the one that fits the needs of your investment portfolio.
In the end, after you have evaluated price, experience, and accounting reports, the key decision factor will be the level of trust you have in the management team of the company that will be taking care of your property. If you have any questions at all call me at 617.297.8641. I’d be happy to help you select a property management company that’s right for you!