All Forum Posts by: Nicholas Cook

@David Hanson

I would determine how hands off or hands-on you want to be. This will help you find the right provider.

1. If you want someone proactive, ask them what they do when they get a notice to vacate? What is the process to re-rent the home as quickly as possible. I do think it is unrealistic to assume you will not have a vacancy of more than 30 days. There are a lot of factors outside the managers control that can impact this such as you being reasonable about the price and being hands-off.

2. As them for their top 3 vendors in each  category such as plumbers, electricians, etc. this will show if they have preferred vendors.

3. I would ask if they have in-house maintenance. This is a major advantage in most cases for turn speed.

4. I would ask what kind of work flow software they use such as ProcessSt, Trello, etc. This will let me know how they run systems. Do they use cloud platforms or paper?

5. I would ask what sort of enterprise software they use e.g. Buildium, Appfolio, Yardi, etc.

6. I would ask about their ratio of property managers to doors/units.

7.  I would read online reviews. These days both owners and residents look at reviews when deciding to work with/rent from a PM company. Now it is important to keep in mind that management companies will have negative reviews from time to time because they charged someone a late fee or a resident didn't get their deposit back. For this reason you want to look for a trend. Do a lot of people say they don't call back or that they have poor maintenance?

8. You want to work with someone who is part of a professional association as this is a signal that they are interested in building and following best practices. Some organizations are the Institute of Real Real Estate Management (IREM) or the National Association of Residential Property Managers (NARPM).

9. Personality and communication style are big. You are going to be working with this person for usually a year if not much longer. It is important you feel like you can have a good relationship with them.

10. I would ask how they handle security deposit accounting and what methods they use to ensure they can charge a tenant properly for damages at move-out.

11. I would ask about the leasing process and how many days a week they show property as well as where they advertise?

12. I would ask them to describe their differentiating factors. Why choose them?

I hope this helps!

@Damien Ray, this is not common practice, but you can charge whatever your agreement allows. 

@Account Closed Always raise the rent when possible. It can actually be a disservice to the resident not to. Rent increases are necessary for the following reasons;

1. They allow you to build up a capital expenditure fund to pay large items such as a roof, furnace, sewer line, etc. You want to make sure that you've save enough money to handle these items when they arise.

2. This is a business and needs to generate a rate of return. Someday you will have a tenant that is probably not so good and it will be expensive.

3. It helps prevent price shock. If you gradually increase the rent over the years it is easier for people to manage than suddenly being faced with a significant increase. This can happen either because your financial circumstances change or you sell the property down the line and a buyer decides to increase it.

@Bill E., it's based on total household income.

@Chris Purcell, by default we have vendors schedule with the resident directly. If the resident cannot be present we provide access to the vendors.

There is no reason you should need to be present.

@Jimmy Martz, we do a walk-through during their first year around the 60 day mark, and then every 6 months moving forward. Inspections are helpful, but you also do not want to alienate the residents. If you are their too much it can make them feel like it isn't there home and impact resident retention.

@Account Closed, if he passes a background check then I think it really is up to the exiting resident. If you formally add someone to the lease they get all the rights that go along with that. She may want to retain the power to ask him to leave which will be given up if he is added to the lease.

As a general rule I don't see any issues if they understand someone cannot just be added and removed without all parties agreeing. 

@John Davis, I also recommend NARPM, but it also depends on what you plan to manage. The Institute of Real Estate Management (IREM) is another good group.

Honestly, I would either interview a few property management company owners about the process or attend a conference and talk to people prior to jumping in 100%. It will help you understand what challenges you may run into so that you can anticipate them.

@Luiggi Amoretti, property management is a very challenging business. It is low margin and focused primarily on solving problems. This often means you do a lot of hard work and get very little recognition. You are also serving two different parties with often times very different goals. If you think you would be a good personality fit for the industry it can be a great business because of it's ability to scale and stability. 

I would not get into property management simply to own more real estate. If that is your focus I would spend time on being a broker and handling sales. 

Let me know if you have any specific questions.

@Katie Stone, I would sell it to the hot tub company. Unless you plan to leave in the property yourself, I wouldn't take on the cost of maintenance or additional liability.

It would be good to contact your insurance company if you are considering keeping it to understand the risks.