What is the #1 thing you look for in a Property Manager?
Hey everyone! I wanted to reach out and see investors' specific criteria when selecting a PM.
Do you have a checklist of things that a PM must check off? Is the majority of it price based? Do you make a decision based on the specific PM you work with or the firm? Are there immediate turn-offs that keep you from working with certain PMs? What criteria do you want your PM to have when screening tenants? These are just a couple of questions that I could think of to get some feedback. As a PM I want to know how can I cater my services to fit more investors' needs. Thank you for your feedback!
Hi Caleb,
As a property manager, I would recommend you to check price x service. Try to understand exactly what is included in the management. Sometimes people ask me the price I charge but they do not understand everything that is involved in my price.
For example, I offer a full service vacation rental property management. When I say full service, I mean it. I deal with everything for the owner - the only job that the owner has is to check the monthly statement and receive his part.
The majority of my owners leave in other state and some of them bought an empty house. As a vacation rental, I helped them with furniture, installation, setup, staging and everything else to get the property ready for rental. And after that, I take care of bookings, guests, housekeeping, marketing etc.
So the best advice I can give you is to understand everything that the PM wants to charge X everything that he is offering and if that fits to your needs.
Quote from @Caleb Mallory:
The #1 thing I would look for is communication. Here's my generic advice of things you can look into.
Remember: cheaper doesn't mean you'll make more money.
Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Regardless of how you find them, try to interview at least three managers.
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 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 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. 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, particularly if you have a lot of rentals.
4. Review their lease agreement and addenda. 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, late rent, evictions, turnover, etc. 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 policies are 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 that a tenant is 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.
7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?
This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!
#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Someone who is responsive and super transparent with you. Someone that is willing to give advice even outside of the PM's best interest. Someone who has deals in their pipeline as well
#2 Managing Your Property Contributor
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#2 Managing Your Property Contributor
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@Caleb Mallory transparency
Communication and transparency are KEY to ANY professional relationship. Heres a hint..... are the PM companies pricing listed openly on their website? Or do they fly by the "it depends" model? Good luck and happy investing!
@Caleb Mallory A frequent sticking point for many property owners that prompts a lot of questions here on BP are the expectations and/or confusion around repairs. Specifically, when a PM has to make a repair but fails to notify the owner in a timely manner (or at all). You want an owner to know that you will be transparent with any and all repairs. If an emergency repair gets made, what dollar amount is an owner comfortable allowing the PM to make without their immediate approval? Most PM contracts have a fixed dollar amount or reserve for this type of situation but it can be easily abused for some. Be sure to make that clause very clear in the contract so there is no confusion later. And above all, make sure the lines of communication are clear and always open. You don't want the owners monthly statement to include any unpleasant surprises.
Seems to have been repeated quite a few times on this thread but transparency is key.. You NEED someone who you can comfortably hand off properties to and you can trust that they'll deliver the performance of your units exactly as it is- don't overexaggerate the good & don't underdeliver the bad. You'll need someone that is straightforward and honest so you can adjust your operation as needed.
Responsiveness and transparency are key when looking for a property management team!