Revenue can be generated from rental properties in a variety of ways. It is important to note, however, that your investment’s success depends heavily on the quality of your property management. It can be difficult to find a quality property manager (PM). The needs of a property must be assessed based on many factors.
To maximize your rental property’s earnings, you need the right property manager. This article explains what a property manager is, why they’re important, and how to find one.
What is a Property Manager?
The term property manager refers to anyone who performs the various tasks involved in operating a residential or commercial rental property for a fee. Simply put, you pay them to do the grunt work so that you can focus on other things.
Property management tasks vary according to the type, size, location, and preferences of the property. A property manager, however, has a few general responsibilities:
Listing and advertising
Screening potential tenants
Collecting deposits and rents
Responding to tenant requests and emergencies
Property managers are not all the same. It is common for a property manager or management firm to specialize in a particular field. Property managers are not all suited to the same role. Managing a residential apartment complex, for example, is very different from managing a single-family home.
The PM’s responsibilities also depend on the role you want them to play. In addition to responding to tenants’ emergencies, scheduling routine maintenance, and collecting rent, you can also outsource tasks like leasing, marketing, and legal matters. If you prefer, you can hire a management company to handle everything for you.
Why Hire a Property Manager?
Managing a property yourself can save you a little money if you have the time and resources. However, managing a property can take up a lot of your time. The nuances of managing a rental property aren’t something many investors are interested in or have the time to handle. The following are a few reasons why you should hire a property manager.
It takes a lot of time to manage rental properties, as mentioned previously. Hiring a PM will free up your schedule regardless of whether you have a full-time job or prefer to spend your time elsewhere. Rather than dealing with 3:00 a.m. maintenance emergencies, requesting quotes from vendors, or trying to squeeze showings into your busy schedule, you’ll need a property manager. If you delegate the property’s responsibilities to a PM, you will be able to earn without having to worry about anything.
You spend a lot of time solving problems when you manage a rental property. It’s not all fun and games when it comes to rental properties. There will be times when you find yourself in uncomfortable and challenging situations. Your property may suffer from costly repairs, storm damage, uncooperative tenants, or complicated evictions. When removed from an emotionally charged or stressful situation, making logical decisions is easier. An effective PM can relieve you of some of your responsibilities.
Investment properties are often purchased outside of the state or town where an investor resides. Emergency maintenance requests or ensuring that tenants honor lease agreements can be challenging when you are far away. Property managers who are local to the rental property are preferred by out-of-state investors. Local PMs are beneficial because they are familiar with the area, can assess the property in person, have vetted lists of vendors, and can respond quickly to potential issues.
An experienced property manager can help you maximize your property’s earning potential. The expertise and reliable resources of many PMs allow them to work efficiently and prevent losses. PMs are usually familiar with tenant/landlord laws and regulations, and can handle legal disputes, leases, and money handling. Maintenance and repairs will be handled efficiently by vendors they have vetted. They will probably have established processes for vetting tenants in order to reduce turnover or vacancies.
What to Look For
It can be challenging to choose a property manager for your investment property. The person who takes on this crucial role should be able to meet your needs and expectations.
The following are some qualities to look for in a property manager.
It is crucial to choose a property manager with a reputation for trustworthiness and integrity. Your PM should make decisions in your best interest and conduct themselves in accordance with your values. Ensure that your property manager will treat your tenants fairly and make financial decisions that will maximize your property’s success. Rents can be negatively affected by a property manager who cuts corners to save money.
Expertise is too often confused with experience. The amount of time a person has spent in an industry is not a reliable indicator of their competence.
Rather than focusing on the number of years they have under their belt, focus on these key indicators:
What professional licenses and certifications do they possess?
Do they have a good reputation?
What are their vacancy rates?
Do they have established policies and processes?
What does their client base look like? Do they have properties similar to yours?
Are their contracts transparent and accurate?
Do they have insurance, and what does it cover?
Communication and compatibility
It is impossible to screen for communication style and compatibility on a job application. During the hiring process, this can easily be overlooked. It is crucial, however, to maintain good communication with your property manager and be compatible with them.
The vast majority of your conversations with your PM will be about some sort of problem that needs to be resolved. Communication and compatibility play a pretty substantial role in my experience in being able to work with someone.
It is possible to find someone with all the qualities of a great property manager. Nonetheless, if you cannot communicate or work together effectively, it can become a burden.
How to Find the Best Property Manager
After learning what qualities to look for in a property manager, you might wonder where to start. To help you get started, here are a few tips.
Consult with your broker
Developing a strong relationship with a local real estate broker is one of the best ways to build a trusted property management team. Referrals and insights from brokers can be invaluable.
Ask for referrals
Getting referrals from trusted colleagues and other investors never hurts. Ask why they recommend a particular property manager.
Do your research
Make sure to request references from property managers when interviewing them. Research the PM online, read reviews, and speak with references. Ensure the PM meets all your needs by preparing a list of specific questions.
Warning Signs to Watch Out For
Every industry has its bad seeds. When property managers fail to keep their end of the bargain, things can quickly spiral out of control. Avoid property managers who don’t meet your expectations.
Here are a few red flags when searching for a property manager:
Poor communication: If the PM you’re interviewing is late to appointments, slow to respond, or unwilling to meet in person, this is likely to be the norm.
You should be wary of emails that contain spelling and grammar errors. There is a lack of attention to detail on the part of the PM.
Unprofessional behavior: Ensure that the PM you hire represents you in the highest light. Observe how they conduct themselves during meetings. Consider how they will treat your tenants if they speak, dress, or act unprofessionally.
When a potential PM doesn’t have references or refuses to provide them for reasons of “confidentiality,” it is best to remove them from consideration. Having no references means they are inexperienced or don’t have any good references. It doesn’t look good either way.
Services are not 24/7: Life happens. There are no business hours when it comes to water damage, burst pipes, and broken HVAC systems. Move on if a PM does not have an emergency line with 24/7 assistance. Putting off maintenance emergencies can lead to serious consequences. In addition to providing a habitable living space for tenants, your property can suffer severe and costly damages.
With a property manager on your side, stress can be alleviated, time can be freed up, and your property will be maintained to maximize appreciation. Each investor has unique goals, preferences, and resources, so a PM might not be for everyone. If you’re considering taking on landlord responsibilities or giving it over to a property manager, consider your availability, resources, and industry knowledge before making your decision.
Adapted from this article.