Real estate can be a lucrative investment, but it requires regular attention and proper oversight. Many property owners hire a management company to assist with the day-to-day operations of their property. After all, managing tenant issues, maintaining the property, finding new tenants and more can take a considerable amount of time and effort. While property owners generally hire a management company with the expectation of having an improved real estate ownership experience, the unfortunate experience some have is less than desirable. When you hire the wrong property management company, you may have to deal with inadequate rental collection efforts, low quality tenants, higher vacancy and other costly and stressful issues. If you are looking for the right property management company to hire for your real estate needs, consider these points to make the best decision possible.
Confirm the Company’s Response Time
Timing is critical in several ways when managing a property. For example, when a tenant has an urgent repair issue, it must be dealt with immediately. Some issues can negatively impact property condition, and not providing a timely response can also lead to unhappy tenants with more turnover and higher vacancy rates. Ideally, a management company will have a 24-hour emergency phone number available as well as a policy for always being on call. This includes on holidays and weekends. In addition, timing is critical when leasing a property. Leasing vacant units should be a top priority for a management company. This is because a vacancy creates financial loss for you.
Verify Vendor Relationships
There are many vendors that you will need to work with to property maintain and operate your property. For example, you may need access to an electrician, a plumber, a carpenter, a cleaning crew, a landscaper and more on a fairly regular basis. Ask the property management company about their vendor relationships. You may even wish to contact those vendors to confirm the relationship before you hire the management company.
Ensure Accurate and Timely Financial Practices
The best management company will also assist with all aspects of the property’s finances. This includes collecting rents on time, paying the mortgage payment and other bills regularly and providing you with the net profit for the month. You should regularly receive a statement showing the income and expenses for the property, and the best company will also produce this on demand throughout the month as requested.
Review Tenant Procedures and Policies
When you are preparing a hire a management company for your real estate investments, you also need to carefully review the company’s tenant procedures and policies. First, look at the steps that the company will take to advertise vacant units to prospective tenants. Second, verify that all prospective tenants will have access to a property tour at a convenient time. You also need to review the tenant application and screening process. Tenants often also receive a list of property rules when signing the lease. This may include issues related to pets on the property, noise policies, maintaining the exterior of the property, replacing air filters and more. Finally, the best management company will periodically inspect units to confirm that the tenants are complying with the established property rules.
Your real estate investments can lead to considerable financial wealth when properly managed. On the other hand, they can lead to excessive cost and great stress when they are poorly managed. If you are preparing to hire a new property manager for your investments, carefully consider each of these points. If you have any concerns about a specific management company, you should steer clear of that company and continue looking until you find a company that you are comfortable with.