Managing Your Property Manager: How to Set the Right Expectations
As a property investor, it's completely normal and expected for you to hire a property manager to convert the investment property from a daily grind to a more or less passive income stream. But there's a surprising amount of variation in that "more-or-less," and a lot of it has to do with how well the investor can manage the manager. Over the next month, we'll be looking at the most effective ways a property investor can be assured that his manager(s) are acting appropriately.
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The term “managing expectations” comes to us from the world of public relations, where it’s all about manipulating the public into having realistic expectations of your product — but it certainly has useful applications in the corporate and financial worlds as well. In this context, it’s all about ensuring that your property manager expects to work as hard as you expect him to work. So how do you get that assurance?
Step 1: Communicate What You Want
The biggest mistake you can make as a property investor is to assume that because you’ve purchased a house and hired a property manager, your part is done. A great property manager will make being an investor easy, but nothing will make it a zero-effort situation. Your role is to bring a clear vision to the table — communicate your goals, your desires and your rules to the property manager clearly, and have the property manager say them back to you so that you know they are truly thinking of the situation in the same way you are.
If you don’t have a goal or a plan, make one. Then communicate it clearly to the property manager. If they don’t understand your end game, they can’t help you reach it, and they’re guaranteed to do something, at some point, that isn’t in your plan.
Step 2: Communicate What You Need
It’s important that your property manager understands your goals — but it’s just as important that they understand what you need. Not in long-terms either, but in a weekly, monthly and annual sense. Property managers are accustomed to collecting rent, paying bills, overseeing maintenance, evicting tenants and advertising for new ones, but some seem to have an extraordinary ability to delay doing them in a costly manner, and others are notorious for failing to document the things they do sufficiently.
Ensure that before your property manager begins advertising for your first tenant, they have a workable system in place that gets you all of the documentation and other paperwork you need every month so that you can be assured everything really is running smoothly.
Step 3: Listen When They Talk
A property manager works for you — but that doesn’t mean they’re a gopher. You hire them because they have experience and expertise doing something that you don’t. This means that it’s quite likely that at some point during this process, they’ll present an objection to one of your expectations. That’s normal! It just means that it’s time to sit down and have an honest, in-depth discussion on how you can get as close to your goals as possible while working within the real-world limitations the PM is dealing with.
Give your property manager a solid understanding of your goals and your end game, and a firm list of tasks you expect to see completed every month — and then be flexible in allowing him to work the way he needs to, and in listening to his expectations for you. The more clearly and bilaterally the communication flows in the beginning, the more functional and profitable your relationship will be in the long run.
How do you manage expectations when it comes to your property manager?
Let me know with a comment!