What are some big red flags that stand out to you when searching for out of state property management?
Communication, Communication, and then there’s Communication. Just because someone calls themselves a property management company does not mean they are equipped to handle all the issues that arises in a professional and efficient manner. So ask the tough questions! Ask the questions, write their answers down, and then go fact check! Let’s face it. Managing rental property is no picnic but it’s the systems and team they have in place that could put to bed some of your biggest concerns. When clients call me they inform me that the main reason they are leaving their current PM is because they can not get an answer from anyone. It’s not because everything is wrong but it’s the fact that you are expecting the property manager to protect your investment and if there’s no communication – Yikes! Customer Service is key, man. I can not stress it any more than I have. But it is so true!!!!!! You want the property manager to be licensed, understand quality and top notch customer service for your rental property needs. We manage properties in some of the most desirable areas. But that can not happen if you do not value your residents’ needs and concerns. Needs and concerns are top priority and the knowledgeable team that you hire has to consistently work on improving the quality of service and detail. You want someone who pride themselves in those key areas that I have mentioned.
Ask them simple questions:
1. How many properties do you manage?
2. Can I visit your office?
3. What is your average length of stay?
4. What is your vacancy rate?
5. What is the typical lease term?
6. What is the annual maintenance cost?
7. What percentage of residents who renew their first lease?
8. What is the average days to rent?
9. What is your eviction rate?
10. What incentives and or program do you have in place for residents when things come up?
Most importantly, write down how they made you feel on they call. Did they seem like they were pressed for time and if so, will this be their attitude when someone domes up? I am a believer that the first impression is who they really are. I hope this helps!
Best of Luck,
@Davartay Miller Thanks so much for this reply. I actually took a screen shot of your list and I’m gonna start using that in my vetting process from here on out! I appreciate the helpful response man 👍
Confirm the POC who will actually be managing your property and talking to the tenant. Sometimes, big PMs just assign a rep for your property and they might not be the best so try to get as many referrals of the person who manages properties from other investors in the area. Sometimes, the PM might be nice but one of the managers might not be easy to work with.
@Kevin Hintz what systems and SOP do they have in place to deliver consistent results?
@Davartay Miller When people call us I literally feel like they all downloaded the same list of questions off of a BP article. I then ask them, how many rentals do you own? How long have you been in real estate? How hands off (or on) do you want to be? Do you have $500/prop to place in escrow for larger repairs?
I get the bad guys out there and the need to vet. Number one request you can make: please give me 10 references from folks you manage for, good bad or ugly.
Use the biggest and best company you can find even if it cost you more money short term. The quality of the PM will save you money in the long run. A quality PM are likely not going to scam you and will have processes in place with the right staff to handle your property needs. Make sure you have capital reserves because something is always broken. Good luck!
To me a very rigid contract with difficult termination clauses are the biggest red flags. If things don't work out you should be able to leave with a months notice.
@Justin Polston You are absolutely correct! These are also great questions. However, you will be surprised how many PM’s do not know their data, looking to “Keep up with Joneses” and repeating the data of other greats in the industry, and etc. It boils down to the right questions, honestly.
I am not sure if you saw @Tony Mai comment but I can not stress the importance of quality. He hit it on the nail! You can not sacrifice quality for a company that’s “cheaper.” Price is often the deciding factor in a consumer’s choice to buy, but if asked many will not agree this is the case. Customers don’t want to seem ‘cheap’ nor do they always want to buy ‘cheap’ items. They generally want value for money or a less expensive item. It’s funny when some claim they are cheaper and when you get into the “nitty-gritty” of things.... they are actually more expensive. Always remember everyone can do it cheaper but not everyone comes through on their promises! Some companies can’t be real and they make fake promises – “to keep up with the Joneses”. I often tell clients, respectfully, we do not proclaim to be the cheapest. If you want cheaper.... yes you can probably find cheaper online! But unfortunately it’s not us and that’s okay. Perhaps we are not a great fit. Our goal is to make life easier for our customers.