In today’s blog, we will discuss the important role of a property manager and how they can benefit your real estate investment business. On this blog, we tend to focus on fix and flip properties or buy and hold properties which can be rented over time. Depending on your investment strategy, location and time requirements, the level at which you employ the services of a property manager varies. Property managers come in many shapes and sizes, from collecting rent to doing repairs and maintenance on the property; it all depends on what you need them to be responsible for. Handymen are fine for doing small jobs in under an hour or two, but when something goes wrong, and you can’t be there and need an experienced person on the ground to fix the issue, then a property manager is the person you call. Also, a property manager is helpful if you own more than one rental, far away from each other. I live in Canada, and when I purchased my first property in Ohio, it was from a property manager responsible for placing tenants, maintenance and managing repairs.. However, the property manager I chose was not a good one, and I learned the hard way that not all of them are the same.
So from that experience, I will share my tips on what to look for in a property manager. I have a simple mantra; if I am not willing to live in one of my properties, I will not expect one of my tenants to do so. Therefore I need a property manager who shares my expectations and understands that a good-paying tenant is a happy one. This process begins as the vetting stage, and a property manager with experience in the local area will help you choose the right tenant for the right property. Local on-the-ground knowledge is essential and should be the first thing you look for, along with good references or referrals from a realtor if you are working with one. They have built up trusted relationships with key people in the industry. Do some research online and check out any reviews or ratings they may have. If they are established and with a good reputation, this should be reflected in online feedback from clients and customers.
Another revealing factor when choosing a property manager is visiting properties they manage. This will provide you with a good reference for their work quality. An untidy property with garbage everywhere, neglected and in need of repair does not advertise the skills of its property manager very well. However, a property that looks maintained and tidy, with lawns mowed and exteriors painted, will reflect confidence and care. Another good tip is to talk to tenants and ask them if they recommend the property manager that they currently have. Do they respond quickly to calls and fix issues to their satisfaction? Are there any issues with problematic tenants in the building, how are they dealt with, and are they happy to sign a new lease when it comes to renewal?
When you have an idea of the property manager you want to employ, you will have to meet and interview them to see if they are a good fit for you. Questions you will need to ask of them include their experience, how long they have been working in the local industry and their knowledge of federal and local council law in that area. How does their eviction process work, and how do they treat their tenants? The next thing you need to establish is their fee and charge structure. Will it be on a percentage of the gross rent? Do they require a deposit upfront for minor repairs? Then can vary from $1000 to $5000 depending on the size and quality of the property. In the US, some states require property managers to be realtors, so you need to check if they hold the relevant licensing to act as property managers in the area you invest in.
Another good question is if they do the repairs and maintenance themselves. Maybe they are a qualified tradesperson like a plumber, electrician, or general contractor. This is a good indication of their expertise and experience as property managers. If your real estate investment strategy is to buy and hold, I hope my above suggestions will help you choose the right property manager for you. If you need any personal recommendations or advice, please feel free to contact me. Until next time, invest wisely.
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