One of the most crucial decisions you will have to make as a real estate investor is whether or not to work with a property management company. Undeniably, property management is an extra expense, but it also means you can be totally hands-off and entrust your investment to the pros. In this post, we’ll discuss why you should consider working with a property management company, and share a few things to consider when choosing one.
Why consider hiring a home management service?
There’s a long list of reasons you may consider partnering with a property manager or property management company. For most real estate investors, the choice to hire a property management company is centered on convenience. Due to their rental’s distance from their homes, it’s more economical to hire a local company than to drive to and from their rental every day. For others, their portfolios have grown so large that they can no longer manage them independently.
Another common reason to hire a home manager is if one’s responsibilities aren’t suitable to one’s abilities. When you run a rental, not only will you have to know how to collect rent, but you’ll also have to be familiar with laws, know how to do basic maintenance, and many more. It would be risky to self-manage your rental if you aren’t sure of your skills.
You may also consider hiring a home manager or home management company if you want to manage select parts of your rental enterprise. For example, you may want to control the tenant selection aspect while allowing your property manager to deal with day-to-day management (such as maintenance and tenant communications).
5 things to consider when hiring a home management company
When you hire a home management company, one of the advantages is that you can reap the rewards without doing the work. This is particularly true if you opt for a full-service property management firm. However, just because a property management company can do the job, doesn’t mean every property management company can do the job well. When it comes to choosing who to partner with, it’s important to note that not all companies are the same. With that said, you need to do your due diligence to find the company that meets your property’s needs and aligns with your investment goals.
1. Do they provide the property management services you require?
One of your main considerations should be whether or not the company offers the services you want. Some property management companies deal only with marketing, while others will concentrate only on maintenance. That’s all and well if you prefer partial property management, but if you truly want your rental to be profitable, it would be wise to opt for full-service property management. In full-service property management, a property manager will take care of everything for you, from finding tenants to accounting.
2. Do they have a solid reputation?
New companies are a no-no – after all, you wouldn’t leave your investment with someone new to the industry, would you?
By asking the company’s past clients about their experience, you can get a good idea of what your experience will be like. However, it’s worth mentioning that what you read on the Internet may be untrue. A property management company with all five-star reviews may have written those reviews themselves, or have paid others to leave positive reviews.
The truth is, regardless of how good a property management company is, it won’t be able to please all its clients. It would be impossible to get nothing but five-star reviews – that’s too good to be true. With that said, be wary of firms that have received pure praise from their clients. As counterintuitive as it seems, a mix of good and not-so-good reviews is actually a green flag.
3. What properties have their property managers overseen?
Experience can determine how successfully a company can run your rental. A company with a good reputation means they’ve been in the industry long enough to have gained experience, and that they know exactly what they’re doing. It also means they can predict what your property will need and will know how to deal with every type of repair-related concern. For example, if your property has a leaky pipe, they’ll know how to fix it fast since they’ve fixed countless pipes in the past.
In addition, you’ll want to make sure you partner with a company that has managed your type of property, whether it’s a home, condominium community, or row of townhomes. Properties have unique requirements that may only be satisfied if your company has suitable skill sets. Furthermore, each property comes with its own sets of challenges, such as tenant types, rental contract lengths, maintenance to-dos, and more.
4. How do they communicate with clients?
One of the red flags of property management is when the company doesn’t put in the effort to communicate with you. A good property management company should be able to constantly update you about the property’s condition, whether via call, email, or other modes of communication. They will understand that, since it is your property, you’ll probably want to be kept up to speed about even the minor details.
Inquire if you’ll have a point of contact to whom you can address your concerns to. If you’ll have to go through multiple property managers to relay your message, that’s a sign of poor company procedures. You should be able to communicate with them conveniently and at any time.
5. How do they conduct maintenance, inspections, and repairs?
Property upkeep is at the top of the list of your property management company’s duties. While they won’t conduct maintenance themselves (they hire vendors for that), it’s important to know if you can count on them to care for your property as if it were their own.
When choosing among your potential property managers, consider their maintenance practices. How do they inform tenants that they intend to do maintenance? What does their property management plan look like (and do they even have one)? How will they handle move-in and move-out inspections? Do they have a quality assurance checklist to make sure the vendor met the maintenance requirements?
How your property management company maintains your home will be a reflection of your rental business. If your tenants aren’t satisfied with how the home is maintained, they’ll surely tell others, and remember – word of mouth spreads fast. Do you want your reputation to be ruined?
These merely scratch the surface of what you should consider when choosing a home management company. There are other practices you can examine, for example, how they screen tenants, collect rent, and vet their vendors. At the end of the day, the best way to choose a home management company is to go for the one you’re comfortable with.
When you partner with Luxury Property Care, you won’t have to cross your fingers and hope everything goes well. We check all of the items in your checklist, from experience to exceeding expectations. With us by your side, you won’t have to worry about a thing, because we guarantee we’ve got it all covered.