I can’t get over a quote I read a few weeks back on BiggerPockets. It was something like, “An average investment with a great manager is better than a great investment with a bad manager.” It got me thinking how owners can screen property management companies, which can eventually help them out to manage the properties well without any hassle.
There are multiple factors that are involved in finding a good manager or a management company. Below are 10 important things that an investor should seek out in a management company before hiring them.
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10 Questions to Vet Property Management Companies
Is the project manager experienced enough to handle your type of asset?
Don’t hire a single family home or a condo guy or company to manage an 18-unit building. It would be a mess because they won’t be able to handle the pressure.
Is the company is built around a team?
They should have different departments that will help in managing different aspects of the property. For example, the accounts department should manage the rent, the repairs department will look after the repairs and renovation projects, etc. If there is only one guy who is solely responsible for everything, you might get in trouble if he/she goes on a vacation. Don’t put all your eggs in one basket.
How many units do they manage?
Managing just 100-200 units may mean they are not too profitable, which can hurt their stability if they are unsure about how to grow. You need someone with experience, structure and stability.
Are the owners or team members investors themselves?
Do they know the pain of vacancy or understand trying to skirt the grey line of bottom line efficiency, customer service, and safety?
How much maintenance do they handle?
Is there a house maintenance team? The more a project manager can handle in house, the more control in pricing your manager has for your bottom line.
How long has the company been around?
Have they made it through a recession or slow times? Most entrepreneurs learn various lessons the hard way in the first 5-7 years. Is your new company past that, or are you at risk of being one of their lessons learned?
What KPIs do they track?
A company that tracks KPI can see problems or trends before they happen.
What is their overall online reputation?
What comes up on first three pages when you Google them? Where there is smoke, there is fire.
What technology do they use in their business?
Are they using modern technology to manage your property more efficiently, or are they still using outdated methods? This will include project management software, marketing and KPI tools, etc.
How does their marketing look?
Look at their priorities. How great or poor of pictures do they take? What does “rent ready” look like to them?
Finding satisfactory answers to these important questions can help you find the ideal project management company that could assist you in fulfilling your dream of creating passive income.
Do you guys have any other important questions to add to this list?
Leave all your suggestions below!