Property Management Pros and cons ( I am a newbie)
Raleigh, NC · Member since 2017 · 6 posts · 1 vote
Property Management Pros and cons ( I am a newbie)
2 Replies
- Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes8y
In the most basic terms, the pros have experience renting out properties and vetting tenants, handling repairs etc. and take all of that off your plate, with the con being that this costs money thus lowering your return. Some property managers may also be untrustworthy or incompetent so you need to watch out for that as well.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes8y
Here's a similar question: what are the pros and cons of tenants?
There are good and bad but you'll mostly hear about the bad.
The truth is, if you want good tenants you need to educate yourself on what makes a good tenant and then screen applications until you find one.
If you want a good property manager, you need to educate yourself on what makes a good one and then screen them until you find one.
Far too many Landlords hire the manager with the lowest fees or the nice office or the pretty face or the fancy car or the...you get the point. When the manager turns out to be useless, the Landlord blames the entire property management profession instead of acknowledging that they failed to do their homework and find a good one.
Here are just a few tips:
1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!
4. Review their lease agreement and addendums. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.
I hope this basic guide helps. If you have specific questions about property management, I'll be happy to help!
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