4 Qualities to Look for in a Good Property Management Company

Experienced real estate investors know that the quality of the property management can make or break an investment.

But when it comes to property managers, there are those who have our utmost interests as owners in mind, and unfortunately, there are those who do not. For this reason, its important to know what to look for in a good property management company.

While entire books have been written on the subject, here are four qualities that owners should always expect in a good property management company.

1. Experience: It should go without saying, but it is important to hire a property manager with plenty of experience in the business. In addition to confirming that they are properly licensed in the state, things to assess include how long they’ve been in business, the number and types of properties they manage, and whether they have a sufficient amount of staff.

An experienced property manager will be able to provide details about their management processes. This includes things like marketing the property, screening, and qualifying tenants, vacancy rates and tenant turn-around time, responding to tenant requests and concerns, handling maintenance issues and contractors, accounting for owner funds, dealing with delinquent rents, and others.

2. Professionalism: The real job of property managers is working with people. They work day-to-day with existing and potential tenants, vendors and contractors, banks, insurance companies, and a host of people and professionals in the community. In this capacity, the property managers are the front-line representatives for our investment property.

As such, we want a property manager who acts with professionalism in every interaction, whether its overseeing contractors in performing renovations, managing tenants during unexpected maintenance issues, screening and interviewing potential new tenants, dealing with past due rents, talking with tenants about increasing rents, or managing an eviction. This goes for all members of the company’s staff. Professionalism should be an expectation of the job.

3. Owner Communication: As real estate owners and investors, the last thing we want are surprises when it comes to the well-being of our investment. I have an unwavering rule when it comes to property managers, and that is, no surprises.

Of course, as real estate investors we also know that incidents happen, and at times without warning. Its just part of the business. But one of the most important roles of a property manager is to keep the property owners informed on a regular basis about how things are going with property, both the good and the not-so-good.

Standard monthly reports are one thing, but a good property manager will communicate to the owners as frequently as necessary on an ongoing basis. They will communicate early, clearly, and often about both the good and the bad. Whether by phone, email, messaging app, or a combination of methods, a good property manager will proactively keep the owner informed and updated of any major issues, as well as the measure being taking and the progress to resolve such.

4. Clear Fee Structure: While it can be said that a good property manager is “invaluable”, as investors, we still want to ensure that the amount and types of fees we’re paying are appropriate for our market and property.

Property management fees can vary based on the property type, size, and overall services provided. Most companies charge monthly fees based on a percentage of rents. This is probably the most common fee structure.

But this is definitely an area where our above rule should apply…no surprises. As such, beyond the standard monthly rate, its important to take note of what other fees may be involved and make sure that everything is clear and understandable. For example, is there a lease renewal fee? How about an eviction fee? Is there a markup on repairs? When it comes to fees, the details are important.

Conclusion

Good property management is a must for passive real estate investors. When hiring property managers, four qualities to look for include sufficient experience, professionalism, good communication with owners, and appropriate fee structures. A good property management company will strive to provide a stress-free experience for owners, assuring us that our property and tenants are in good hands.