Newbie: How to choose property management company ?

Question

How to choose property manager?

What to look for in property managing company?

What questions to ask of them?

Mark Ainley · Answer

@Nick S Koval Couple of thoughts:

• Review online reputation - This is huge. Typically every market has a couple of PMs that stand out(for the good) and they usually do for a good reason. Look at there bad reviews and see how they handle them. This is often a better sign of how they handle issues. Defining the service - most managers charge within the same range in a given market but any good manager should have a detailed breakdown of what you get for each service they provide.  Fees are Ok if you, the investor, get the value for it. Communication - about half of the doors we added in 2019 came from other property managers being fired.  The number one reason owners left them was poor communication or lack of or responsiveness.  Ask then how they communicate or when you can expect to hear from them. The question is “If I email you today..when is the longest I should expect to hear back from you?”
• I can keep going but those are top three.  Feel free to reach out if you ever want to talk more.

Soh Tanaka · Answer

@Nick S Koval - You may want to have a few in your mind. While it's not a must, it's good to have a backup property management company, so if one does't work out, you know where to go.

Regarding questions to ask, I'm sure you already have some in your mind. Go ahead and ask them. See if the answers sound like the company has the right processes or just "winging" the answers. Also, how responsive are they when you call or email? Best wishes to you!

Chris Salerno · Answer

Nick, I would start by asking your local Multi Family brokers. They know the best and would recommend the best based on your properties.

Make sure the Property management has a portfolio that has your type of property in it if that makes sense. Example. If your property is a 20 unit complex with no office. I would want a property management company that works with a lot of properties between 15-50 units. They understand what needs to get done. When you have a large PM company handle a smaller complex from my experience I have noticed they charge a lot more.

I would also ask that property management company for references of other owners to see how they like working with them.

Good luck! Looking forward to your success.

Cory Carlson · Answer

Generally property management companies have their hand in certain submarkets of the area. Depending how big your market is, it doesn't make sense to use the company with good reviews and resources 30 minutes away. If you have not acquired a property yet, I would wait until you have it under contract to start shopping property managers. As other has mentioned, there are two sides to working well with a property manager.

1. They have a good wrap sheet of working well with prospective tenants and current tenants. They have good market knowledge to keep up with market rents without short changing the performance of your investment. This for example could be a property management company who keeps rents low to avoid turnover. Full service repair/maintenance team. This does not need to be in house, but makes sense why you should pick one close to your investment. If you need a plumber, they have a local one the manager uses.

2. You have to like working with them. Not sure what type/size investment you will be working with but your role as the owner is to manage the manager. You let them know on turnover your vision. Perhaps for units 3, 4, 5 you just want to do SOFT turns - paint, carpet, clean, move on. But in units 1 and 2 you want to do HARD turns - paint, flooring, appliances and counter tops. Also in the event something breaks and is over $X setting the foundation that you want three bids. You need to set the expectations which depend on how involved you wish to be.

Richard Cole · Answer

Hi Nick,

-I'd look for someone who has experience within your asset class and a solid understanding of the market. Certifications, licenses, owning rentals, and the ability to do in house maintenance are also beneficial.

-Ask about experience, rental comps, vacancy rates, time to lease up, hidden fees, and how their pricing is structured.

Hope this helps!

Newbie: How to choose property management company ?

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