Taking care of even one rental property without the assistance of a good property manager amounts to working a second job. An excellent property manager enables landlords to have a truly passive real estate investment experience. Of course, the key word here is “good.” There are property managers, and there are property managers. Let’s find out what to look for in a property manager so you can have an entirely passive landlord experience.
You need to be able to trust that your property manager will follow through on their promises. You have a significant amount of money invested in your rental asset, and you should be able to count on your property manager to protect it. One way to find out if your landlord stands behind their word is to check references. The property manager should be able to provide you with at least three other owners that you can call to check on their history. Make sure you take this step because this will tell you right away whether you should even put that company in the running for your business. If they have a terrible reputation, it won’t be long before your property has a bad reputation, too.
Choose a property manager whose values align with your own. There are too many varying degrees of how people define “maintenance” to make any presumptions about how well a property manager will care for your rental asset. As an example, the property manager might think it’s perfectly fine for a front screen door to be hanging crooked off its hinges. It’s not like it’s going to cause further damage, right? But you, understanding the importance of curb appeal, would fix it right away. In essence, you should look for a property manager who has the same principles as you when it comes to taking care of the property. You shouldn’t have to explain to them why it matters that the doorknobs don’t keep coming off in your rental property.
Find a good property manager that shares your goals. For the rental investment to succeed, you and the property manager should strive for things such as a high occupancy rate, infrequent turnovers, quality tenants, timely rent payments and reasonable maintenance costs. That last item is especially consequential. You don’t want a property manager to go overboard on maintenance. Every maintenance expense ultimately cuts into your profits. There’s a line between taking care of a minor maintenance issue themselves and calling in the cavalry for a stuck kitchen drawer. An in-house handyman can handle many maintenance items; they don’t require the professional—and costly—services of a certified tradesman. You should have a conversation upfront with any property manager you’re considering to ensure they’re on board with your goals and expectations.
A quality property management company will have a robust infrastructure. What that means is that they’ll have different departments to handle things like utility turn-ons and turn-offs, rent collection, landlord reporting, maintenance requests, and so on. You don’t just want to have a skeleton crew trying to juggle a bunch of properties. Things can fall through the cracks quickly that way, and you’ll be the last one to hear about it.
On the other hand, when your property manager has a solid infrastructure, you’ll be able to comfortably scale your real estate investment portfolio without needing to start the search for a suitable property manager all over again.
Number of Assets Handled
The more assets the property manager handles, the higher the chance for details to get overlooked. Ideally, you want a property manager with no more than 200 or 250 assets on their books. Of course, if the company is a large outfit with a reliable infrastructure, they might be able to handle a more significant number of assets comfortably. It all depends on the type of assets they manage and the infrastructure.
Type of Assets Managed
A clear indicator of what kind of property manager they are is what kind of assets they manage. Naturally, you want a property manager that uses some discretion with their properties. What you’d be looking for is a company with experience managing the asset class or classes that most closely resembles your real estate investment profile. This is the only way you can be assured that the company will understand the nuances of dealing with your tenants and your properties. For instance, you wouldn’t want to hire a property manager that specializes in C and D class properties when your portfolio is made up of high Bs and As. That company won’t understand the benchmark, and they certainly won’t know how to attract or treat the standard of tenants you’re after. The best property management companies will have their benchmarks. They’ll tell you they don’t manage properties below a certain rent threshold, or with specific other factors.
One thing to avoid when looking for a property manager is the “jack of all trades” type. If you run into a property management company that claims that they do it all, run—don’t walk—in the opposite direction. Companies that try to do it all, managing single-family homes, multi-family buildings, commercial properties, won’t have the specialized expertise to excel at any one type of property. Find a property manager that specializes in the kind of property you own. That way you’ll be sure to get a company that profoundly understands their responsibilities, the tenants, and the market.
It may be initially charming to discover that a prospective property manager still runs things “old school.” You’re looking for the personal touch, and what better way to ensure that than with a company still running operations like it’s the 80s? But the charm falls short when it comes time for action. You can have the personal touch and modern systems. In fact, you need it. Tenants these days almost expect to be able to log in to an online dashboard where they can request maintenance, pay their rent or get community info. As a landlord, you’ll appreciate the accuracy and convenience of an online owner portal that offers things like digital reporting, automatic rent deposits, and online communication.
These are all great ways to vet a property management company. At first glance, it may seem like an awful lot of expectations, but when it all falls into place, you’ll be happy that you conducted your due diligence when it comes to choosing a property manager. If you’re interested in considering AmericanRealPM as your property manager of choice in Texas, Kansas or Missouri, please contact us. We’d be more than happy to answer any and all of your questions relating to our services and your property management needs.