A good property management has the potential to turn your rental property into one of your most valuable assets. But finding a good property management firm is not a cakewalk, and many property owners have found that the hard way.
For starters, you need to know how many properties your would-be managing firm oversees as well as the number of employees tasked with managing the said properties. Ideally, you want a property management firm with not only a solid portfolio under their belt, but also qualified property managers within their ranks. This is to ensure that you get good value and sound decisions made on your behalf.
Secondly, you need to know if the property management firm owns any properties themselves. Some investors are reluctant to take on a firm that owns their own properties due to the fact that they will be biased and give preference to their properties. Other investors see this as a bonus for the simple reason that such firms can put themselves in an investor’s shoes, and thus put their best foot forward when it comes to managing the property.
Third, understand that a good property management firm is one that’s able to conduct routine inspections on the properties at no extra charge. Steer clear of property managers who think routine inspections should be on you and instead work with those who see this as a value addition.
The market is flooded with an array of tenant management systems to even keep up with. Much of it is chaff, so you will need to separate the grain from all these options. A good starting point is to go for a property management company that uses a bespoke and quality property/tenant management tool.
Ensure that the software they use improves overall efficiency and that they have no qualms sharing their reports. This is to enable you to gauge their success – or lack of it.
Most good property management firms levy a charge of between 7% and 10% (on average) of the total rent collected to manage your property. Keep an eye out for firms that require you to pay a fixed percentage of the total collectable rent as there is always the chance of a vacancy which – based on their policy – they might not factor in.
This is why it pays to understand clearly what they base their percentages on before signing on that dotted line. Otherwise, you might as well be incurring a loss.
Lastly, you need to know how the property management firm will address any maintenance issues that might arise. Ensure there is always a set amount of money they are allowed to splash on maintenance, and that before doing so, they should always seek your consent first.
Nasar. El-arabi realestatebusters.com & email@example.com, is a member of Metrolina Real Estate Investors Association, which provides education, mentoring, and networking for real estate investing in the Charlotte region. For more information, visit www.MetrolinaREIA.org.