Updated about 5 years ago on . Most recent reply
3 key things to look for in Property Management
Hi BP!!
Well I think I’m finally going to pull the trigger on some long distance real estate investing. I’ve found a place that looks pretty promising for monthly cash flowing rentals. So now one of my biggest fears is finding a property management company that I can trust. I know there are a lot of them out there that do not have my best interest at heart. So basically I’m just looking for some of the most important questions to ask while I am vetting these companies.
If anyone has any tips or suggestions on this it would be greatly appreciated!!!
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@Sean Rhodes, even good property managers go bad sometimes. And even ones that interview great and look great on paper turn out to not be great. I would ask them what the policy is if things aren't working out. Some of them have onerous clauses to get out of your contract. If so, is there a grace/trial period where either of you can walk without recourse?
I don't want to sound ominous but property managers are to buy and hold guys like contractors are to flippers and servicers are to note investors. Good ones are worth their weight in gold, hard to find, and seemingly one step away from going from hero to zero. There are lots of answers to your question on Biggerpockets and the internet in general, but no matter how much due diligence you do you need to be prepared for them to flake out.
Case in point, I had a great property manager in Jax, NC, but then she got sick with no plan to carry the water if she was out. Got bad quick. Next guy interviewed great, looked great on paper, great references, turned out to be a borderline crook in my opinion. Now I have an outfit that is doing a great job, but they are starting to nickel and dime me with add on expenses. They've earned some patience, but if it gets much worse I'll be on to my fourth PM for those properties. This is in a span of 15 years by the way. I don't want to imply I'm burning through them at the cyclic rate. I'm on my third PM for a property in FL too. First guy started out fine then ran the property into the ground. Second group of ladies also fine but just couldn't get on the same page with the communication and accounting. Pretty pleased with whom I've got now. I could go on and on.
Bottom line, do your due diligence, but don't worry about finding your next best friend out of the gate. Find someone who seems solid and pull the trigger. Just make sure it won't cost too much to move on if necessary.