How Your Property Manager Can Make You Money!!!

Property Management is an important topic for investors because at the end of the day our success depends on effectively managing our investments.

Imagine…you just closed on a new apartment building. Of course, you’re super-excited! So, now’s the time to start looking for a property management company right?

Wrong.

Why? Because a great property management company should be on your team during the acquisition stage. That’s because your property manager is more like a partner. A really good property management firm adds value even during the acquisition stage by helping you understand market occupancy rates, current property deficits, and areas of
future improvement.

All of these factors should play a role in determining the offer price for your investment property. If your occupancy rates are below general market rates, a good property management firm that’s familiar with the area should be able to give you an idea why. For instance, is your property located in an area where rooms are usually larger in size? If that’s the case, there’s not much you can do once you’ve purchased the
property. If the previous property manager was not targeting the right
demographic, you’ll have an opportunity to make adjustments. You’ll also gain insight into future opportunities for growth and discover whether you need to request discounts from the seller.

Benefits of property management

When you are evaluating a potential investment, looking at current property deficits allow you to recognize the areas that need to be brought up to standard by the current owner or serve as a negotiating factor to reduce the cost.

A good property manager can quickly spot factors that will affect your ability to lease units. While you will still need a general contractor or other technical professional to check out the specific technical issues, a quick once-over by your property manager will definitely give you an extra set of eyes to help analyze your possible investment. The difference is, your property manager is looking at the situation from a leasing perspective.

For example, take that beautiful fountain that sits in front of your new apartment complex. It’s a breathtaking fountain—but it blocks the view to the leasing office and makes parking difficult—which in turn makes many prospective residents drive past your property to check out other nearby apartments. However, the fountain is actually a water recycling feature that waters the lawn on your community. What should you do? Again, a good property management company should be able to offer some suggestions.

Perhaps most exciting, your property manager should be able to spot areas of future improvements which can increase the utility of the property to residents. Improvements could include having a bus available to transport residents to a nearby train station, making a dry cleaning service available on-property, or simply letting residents personalize their apartments by painting but charging a minimal fee upon moving
out. This makes residents feel at home and prompts them to rent for a longer period of time. A good property manager will know if this makes sense in your area.

At this stage your property manager knows the property and has a clear understanding of your expectations so that they should be able to hit the ground running and start adding value and providing your residents with a level of service that will make them want to rent from you for a long time.

How to find a property manager?

So how do you find such a property manager? Get references through your REIA meeting, on BiggerPockets.com, or from members of your team. Don’t end up like a friend of mine who chose a property manager randomly out of the Yellow Pages…and ended up having to change
property managers mid-contract!

How have your experiences been with property managers please do share!!!