Managing your property manager
I'm new to using a property manager to manage my SFH which I'll start renting out in about 2 months.
I read a post on here the other day talking about better managing your property manager. What are the best tips on how I can better manage my property manager so they're doing their best job at taking care of my property?
Are there any benchmarks in relation to property management that I should know and hold my PM to?
Thanks for your replies!
#3 Managing Your Property Contributor
You hire a PM that you trust to do their job and then you let them do their job. If you don't trust them, find another PM or try managing the property yourself.
Thanks for the reply. Maybe using the "manage the PM" terminology was not the best choice of terms. Is trusting them all we have as a property investor to know if they're doing a great job? Are there not some benchmarks or key performance indicators that we should hold them to? And if along the way we notice the quality at which they're managing the property is slipping away from those indicators then we decide to hire a different PM. For a much a numbers game REI is, I'm checking to see if there are wise investors that have come before me that have those "numbers", or whatever they may be, for tracking PM success.
Quote from @Aaron Law:I think you're over-thinking it. If the manager is handling 100 units for you, then maybe you can set some benchmarks to track. With a few rentals, it is a waste of time.
I'm new to using a property manager to manage my SFH which I'll start renting out in about 2 months.
I read a post on here the other day talking about better managing your property manager. What are the best tips on how I can better manage my property manager so they're doing their best job at taking care of my property?
Are there any benchmarks in relation to property management that I should know and hold my PM to?
Thanks for your replies!
1. Is my PM communicating well?
2. Do they rent it quickly?
3. Are they paying me on time?
4. Do they notify me of maintenance or other issues and seek my permission before spending my money?
5. Are they maintaining the home and providing me evidence of that?
You can occasionally glance at the market to see if your home is keeping up. You can inspect the property every couple of years to ensure it's being maintained or ask the PM to send you an inspection report.
If they are a good PM, you don't need much at all. If you feel the need to watch them like a hawk, then either they're not a good PM or you're a micro-manager.
Thanks Nathan, that's great information!
#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
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#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
You actually ask a very good question!
More property owners should understand that rentals are NOT a passive investment like mutual funds.
Issues to Monitor (politely)
1) Monthly P&L Report - if they don't consistently send it around same day each month, they are not organized and it doesn't bode well overall
2) Monthly Owner Draws - should come about same day each month, hopefully via ACH, with statement showing how calculated
3) Maintenance - question EVERYTHING! #1 source of owner dissatisfaction & confusion.
- We tell all our MNT Admins that if they can't understand a maintenance issue, then how are they going to be able to properly explain it to an owner?
- Some PMC's terrible at overcharging, not properly charging tenants for damages when warranted and doing unnecessary repairs.
- You should expect communication about ALL maintenance work within 72 hours
- You should know the contractual threshhold requiring your approval and make sure it is adhered to except emergencies. We have a local competitor that deliberately seperates single service call issues into separate Work Orders, so each issue falls under the threshhold and they don't need owner approval. Owner only finds out about it all when they see large amount of maintenance charges on their monthyl statement.
- Get your PMC's definition of an emergency in writing and hold them to it.
- EVERYONE has a camera phone, so there's ZERO exuse for a PMC to not provide before & after pics/videos 90%+ of the time, so you can confirm what you paid for was done and done properly.
4) Rent Collection - PMC should communicate when they receive a payment, any NSF, when rent is late, and their ongoing collection/eviction efforts.
5) Lease Renewals - owner should have a say in new rent amount. We send owners statement of current rent amount, how much market rent is for tip-top shape and our recommendation given current property condition and tenant payment/maintenacne history.
6) Vacancies - you should know what's going on after 2 weeks.
- We send owners market analysis with ad copy for approval.
- Thereafter, we send biweekly marketing report with any suggestions to improve results
Hope all this helps!
@Drew Sygit Thank you so much!! That's the type of information I was looking for. This should help to get me started.