From experienced rental property owners, have you had better success with larger commercial management companies or local well established companies
Smaller, local companies are the way to go. Your property will get quick attention to maintenance issues, and it is easier to get your property manager on the phone to discuss owner statements, major repairs, etc.
Hi @Leonard Whitted ,
This is a slightly loaded question. Are there differences? For sure. But what do you define as the difference because there are large local PM's and small commercial management companies as well.
End of the day, the firm doesn't matter. The individuals are what matters. The larger commercial PM's are still local franchise owners and have the same knowledge. And just because they're small doesn't mean they're good at responding. The units:PM ratio is more important than being a big or small firm.
My recommendation would be focusing on the following, and make sure you're completely honest with yourself:
- How much are you willing to pay? This is the biggest and most important question that every landlord should ask. We get a lot of landlords that say they want the best, but then complain at their rates. Unfortunately, you can't have it both ways.
- How much work will your properties require? There can be a significant difference in labor to manage a Class A vs Class D property. If you have a property that is older or low-income class of tenants then it will require more time for the PM. More maintenance and repairs to coordinate. More chasing tenants for late rents. More evictions. Etc.
- What is your top criteria for PMs? Cost, communication, size of staff. This will help you prioritize when interviewing PM's.
- Cost: Previously discussed. However, do not be fooled by the simple lower monthly fee. Make sure you've reviewed their Property Management Agreement and understand every way possible for them to make a fee. Or, what you have to pay for. Some PM's charge a higher rate but include eviction court appearances or even a tenant placement guarantee.
- Communication: This one seems simple. But the truth is these PM's have hundreds of tenants, landlords and contractors trying to contact them daily. Ask them about their communication practice and who you would be communicating directly with.
- Staff: Larger staffs can help with the communication issue, but also cost more. Double edge sword. Clarify how many units they manage and the quantity of PM's. Then confirm if they do real estate sales as well. You'd be surprised how often I talk to a PM that is on their way to a sales showing. Knowing that your PM is 100% or 50% dedicated to being a PM is important to know.