There has been much written on BiggerPockets recently about property management – Do you use a professional property manager? Should you use a professional property manager? What do they do? Are they worth it?
I’d like to discuss who we are as property managers, what property managers should offer, and why I think property management services can be of huge benefit to real estate investors.
Our company grew into the property management area of real estate quite organically. We started like most investors with only one property, then grew in four years to about 56 properties. At that time, I was fed up with managing both properties and tenants and began looking for someone to take over the day to day of our rentals. After interviewing a number of professional management companies, I was not satisfied with any of them. Their response times or the way they communicated back to me was enough for me to eliminate them quickly! After all, the way they handled me was going to be the way they would handle my clients going forward.
So after months of searching, we finally decided to open our own property management company which required hiring real estate agents to run it. The advantage would be that we could then, with real estate agents on staff, also manage properties we did not own. Because we’d been managing our own properties for years, we already had multiple systems and controls in place.
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Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
Some of our Property Management Services include:
- Keeping up with state and federal regulations to maintain compliance and updated paperwork.
- Providing 24 hour marketing of vacant properties through our web pages plus an additional hundreds we connect with.
- Supplying rental applications and all other documents necessary to meet the state Landlord/Tenant Laws.
- Thoroughly screen all prospective tenants.
- Fully account for all deposits.
- Maintain all collected rent and deposits in a client’s trust account, subject to periodic auditing by the state Real Estate Commission.
- Re-key each property with each new tenant.
- Change air filters and provide free filters for tenants.
- Handle all tenant problems.
- Obtain repair bids and notify owners prior to any excessive expenses regarding their property.
- Ensure all required maintenance is done in a timely manner.
- Manage properties efficiently and cost-effectively with leading edge software.
- Provide fully computerized and detailed monthly statements accounting for all income and disbursements.
- Direct deposit monthly payments into owner’s bank account.
- Disburse all tenant deposit refunds and supply required documentation.
- Swiftly and efficiently handle non-pays all the way through the eviction and lock-out process as necessary.
When searching for a property management company, things to look for include:
- Quick response time to your phone calls and emails. – How they treat you is how they will be treating your customers.
- Professional websites. Yes, image and professionalism matter.
- The ability to take and make payments online. Even if your tenants are not able to make online payments, as a property owner, you should be able to view your property reports and receive payments online.
- Preferably, someone who also manages their own properties. – We know what you want as an investor and, because we take care of our own properties, we know how to take care of yours. People have expressed concern that we might give the most time and effort to our personal properties. For us, this is certainly not the case for a number of reasons including that when someone calls to view a property, they are interested in size, location, and price. Steering them to another property location, size and/or price is not an option. And because we manage hundreds of rental properties, too much time and effort would be involved to keep track of which ones we own and which ones we don’t!
What’s the advantage to you, the investor?
You don’t have to handle the myriad of things that go on daily with property management. I have a property owner right now who wants weekly updates on her vacant property. No, we don’t offer this service and she truly wouldn’t want to be bothered with all the capitulation that ends up accomplishing nothing. But, answering her emails has really made me realize all the tiny, continual communications we have when marketing for tenants, showing the property, taking applications and application fees, screening prospects, collecting deposits and first month’s rents, signing contracts, changing locks, accounting for and disbursing funds, and then answering all the first month’s calls as the tenant becomes accustomed to their new home.
None of this makes money for you, the investor. A good property management company will free up your time to find and negotiate new deals which is where your real income lies.
No, do not sign up with just any property management team; interview and try them out. Give them only one or two properties to manage until you’re sure they give you the treatment and results you’re looking for. There are a lot of property management companies available and you may have to kiss a lot of frogs to find the one that is right for you, but at some point, getting rid of tenant and doing your own property management should be a big boost to your bottom line.
Ok, let me know what you think!