How to find a good property manager

8 Replies

Hello all! 

I’m looking to get back into the game (I currently have one rental) and was wondering what I should do when looking for a property manager as well as an agent to find more rental properties (both residential and commercial). Does anyone have any recommendations specifically for the Salt Lake County, Utah county, AZ and TX areas? 

Thanks!

Paul

Those are all great areas to invest. I personally manage my own properties because I have a hard time finding property management that handle things the way I would. I wish I had a great Refferal for you. As far as investment properties I can only speak for Utah and salt lake county.  
I think you should watch the market closely. Don’t just go out a few weekends and pick from what’s on the market. Watch, study and then make a move when a great deal hits. The good ones go fast but they are still out there. 
Despite the many opinions of a coming recession , I personally think we have a few years of continual growth and then it level out or possibly a very slight correction in the housing market.  If you are buying for long term hold (more than 5 years) it shouldn’t affect you regardless. 

Welcome back 

Originally posted by @Cherie Orellana :

Those are all great areas to invest. I personally manage my own properties because I have a hard time finding property management that handle things the way I would. I wish I had a great Refferal for you. As far as investment properties I can only speak for Utah and salt lake county.  
I think you should watch the market closely. Don’t just go out a few weekends and pick from what’s on the market. Watch, study and then make a move when a great deal hits. The good ones go fast but they are still out there. 
Despite the many opinions of a coming recession , I personally think we have a few years of continual growth and then it level out or possibly a very slight correction in the housing market.  If you are buying for long term hold (more than 5 years) it shouldn’t affect you regardless. 

Welcome back 



thanks for your reply! Are you local to salt lake county? My issue is that I would be an out of state investor at this point. I’ve been following it closely, but I think it would just be helpful from a stress management standpoint to have a property manager.

How have you managed not having a property manager?  

@Paul Park It can be tough to be an out of state investor.  On my out of state properties, I talked to several people before making an offer.  I talked with a few property managers in the area to get their opinion on the projected rents and the area to make sure I heard the same thing from everyone.  I wouldn't always trust your real estate agent's analysis, make sure you get a few other opinions.  On one of my out of state properties, I feel confident managing on my own and I have a local contact that helps me when I need help with on-site stuff, like showing a vacant unit.  I am about to close on another property out of state that I will have a property manager take care of completely.  I chose that property manager after talking with a few others in the area and felt like they would do the best job, even though their fees were a little bit higher. 

I am a real estate agent as well, and manage my own properties located in Utah.  I also help some out of state investors manage their properties.  Some of them have me tenant the property and then they do the day to day management, and some others have me take care of it entirely.  So, you could also look for an agent that might assist you with tenanting and managing the property wherever you decide to invest.  If you can find an agent that also invests in properties in that area, they should be able to point you in the right direction as far as management as well.  

The rental market stinks in Utah. You can't find any properties that come even close to rent high enough to cover maintenance, property management fees, and the monthly mortgage payment. Everyone holding rentals in Utah are either losing a ton of money or they bought super cheap way back when or they own the property free and clear (and can't capitalize on that property's equity to utilize elsewhere).

Hey @Paul Park I manage all of my own properties as well and have found success through doing so. For me, the fees that PM's charge are hard to swallow given the times that go bye when nothing needs to be done to the property, other than make sure that rent is coming in each month. Filling the property with a new tenant is generally the hardest part I have found. If you are out of state, that would be much different though, and having a PM on your side could be very beneficial.

There are still good deals to be had. I bought a property last year as a BRRRR and it cash flows $700/month with none of my money left in the deal (15% equity now). You just have to be picky about what you are looking for, and be ready to pull the trigger ASAP when something comes up. Happy to chat further about it!

@Paul Park

See below the several questions that my team uses when we look for a property management company. We are in the multi-family real estate field so the questions may vary if you are looking for single family rentals but should be relatively similar and can help out. Happy to answer any questions you have on them. 

  • How many class A properties do you manage?
  • How Many class B properties do you manage?
  • How Many class C properties do you manage?
  • How long should it take (timewise) for a leasing agent to respond to a prospect in the best case scenario?
  • How long should it take for a leasing agent to a respond to a prospect in the case that she is very busy?
  • Approval process on expenses?
  • Are there any hurdles in terms of your company getting the fee? Meaning below scenario reflects 3 possible results and simply want to understand the range of your companies motivations:
    1. Property performing at 80% occupancy (poor performance) would earn 1M in revenue for the year. (your take 50K/5%), but for us this is bad because lets say this is the cutoff where we don’t have enough cash flow to cover the mortgage payments.
  • Property performing at 98% occupancy (strong and more than one can expect in performance) Property would earn 1.4M. (You take would be 70K/5%)
  • Property at 95%, earns 1.2M, (your take would be 60k/5%).

Presuming you would agree that A is unacceptable, that B is fantastic and that C is reasonable, can you speak to if there is anything built into the payment agreement, upfront with respect to potentially getting a lower fee if you are at 80%, 5% fee if your at 95% and above 5% if you beat the 95%. Wanting to understand if there is anything built into the standard agreement, (Other than your wanting to perform well so that we stay with your company) that would motivate strong performance.)

  • What are the terms of the initial contract that you generally do?
  • If your unhappy with us, how much notice are you required to give us?
  • If we’re unhappy with you how much notice would we be required to give you?
  • Are we able to be involved in the budget with respect to revenue, expenses, and rehab.
  • Are we able to be involved in the planning process, business plan process with respect to design of exterior and interior of the property in case of rehab or even in case of simply upgrading prior standards that prior management company was using for turns.
  • Presuming your company makes the payments for all property expenses?
  • How much money would your company need from us upfront?
  • At what point would your company come back to us saying that funds are low, etc.?
  • How often would your company transfer the available cash to us?
  • Do you generally handle mortgage payments or would we handle this?

My suggestion would be to find a good team that is familiar with real estate investors, and is familiar with how investors think, i.e they make decisions by the number, and not necessarily by emotion. If you find a really good agent, they will normally have people that they have worked with in the past, that could be use to you as well; for example title agents, prop. managers, and lenders. Welcome back to the game, and good luck to you!!