If you’ve gotten the first three parts of this series well in hand (you and your PM are on the same page in terms of expectations, information flow and documentation), you might think you’re good to go. But in property investment of all industries, there’s one last detail that you might never need — but like all good insurance policies, you’d be a fool not to have. It’s a coherent, premeditated emergency response plan for your property manager to execute.
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The Property Manager’s Role
You need to know what the most common types of disaster in your area are, and you need to sit down with your property manager and develop a plan for each type of disaster. They need to understand exactly what you need done in the worst-case scenario, just in case.
For each kind of disaster, your plan should include:
- How to recognize a disaster or potential disaster, and when to start alerting others
- How to keep the tenant safe (always the first priority!)
- How to minimize damage to the structure
- How to minimize damage to the tenant’s stuff
- A list of the most important people to call immediately upon recognizing the danger
- A list of the most important people to call after the danger has passed
- A plan of how to get back into rentable condition as quickly as possible after it’s all over
- A list of all of the things that need to be documented during and after the whole event
Obviously, for each kind of disaster, these items will take different forms — tenant safety is a very different thing during a flash flood than it is during a riot — but those seven steps are consistent. Sit down with your property manager and go over each step in detail.
You don’t have to come to the table with all of the information. In all likelihood, your PM already has a long list of contractors, tradesmen, disaster cleanup crews, disaster recovery experts, water and mold damage remediators, and so on. The important thing here is that when the planning is done, both of you are holding copies of the same plan and you both agree that it’s the right plan.
While your role in most quotidian aspects of dealing with your investment property consists primarily of helping your money grow, when a genuine disaster hits, you should be prepared to take a more active role. In the moment, you can often help yourself immensely by having a copy of your own disaster response plan on hand and offering to start making those critical phone calls the moment your PM calls you and tells you there’s a disaster at one of your properties.
As things wind down, after the catastrophe is passing, your goal should be to take stock and keep your eye on the long term. It’s quite likely that your PM will be busy for a couple of days or even weeks dealing with the disaster recovery crews and tenants. Anything you can do to enact your “return to rentable condition” plan during that time is purely money in your own pocket. And as long as you and the PM are indeed following the same plan, you don’t have to worry about replicating effort. A quick text that says, “I’ve done parts 2-7 of section 3” will suffice to keep both of you working smarter.
How do you have your property manager handle emergencies?
Let me know with a comment!