Choosing a property manager is one of the most important decisions real estate investors will make. A good property manager will boost your investment returns, and make an investor’s life easier. A bad property manager, on the other hand, can turn a good investment into a bad one, and make an investor’s life a nightmare. It is crucial then, as a real estate investor, that you don’t make the mistake of choosing a bad property manager. Choose the right property manager to handle your properties from the start. Let’s take a closer look at what makes a good property manager, and then talk about how to get them.
Number of Properties under Management
The size of the property management firm is no guarantee for quality, but in this market it is a significant indicator. Property management is a very much fragmented industry with many different kinds of operations in the market. Many shops lack standardized systems and processes, which can make it difficult to bring consistency and scalability to property owners and investors. Larger property management businesses tend to have dedicated staff for various activities, and better systems and processes.
If healthy patients are a good yardstick to evaluate the performance of a family physician, then reasonable repair costs on properties are a good measure of a property manager’s abilities. Efficient managers focus on prevention and rarely repeat repairs due to mistakes. Inefficient managers often have egregious markups on repairs, and this will show in their numbers.
Managing vacancy is the single most critical aspect of a property manager’s job. It is a comprehensive process that involves tenant marketing, tenant screening and tenant management. Well-organized managers have multichannel marketing initiatives to guarantee maximum tenant lead flow. Many managers visit their tenants once a month to collect rent and carry out an “eyeball” inspection of the property. Successful property managers have vacancy rates of no more than 6% to 8% and stay open seven days a week.
Eviction Track Record
Delinquent renters will need to be evicted, and a strong eviction process will minimize losses. Many property managers will initiate the eviction processes in early delinquency based on the renter’s profile. The average number of monthly evictions in the portfolio and the time it takes to evict are good data points to evaluate. Good property managers should also be able to screen out most of the bad apple renters. Choosing the right tenant from the start is always preferred.
Days to Fill a Vacancy
This is a more granular metric to measure the efficiency of a property manager’s tenant marketing capabilities. Vacancies hurt the investor through loss of rental income and potential expenses stemming from vandalism or theft. A good property manager will keep tenants in the property longer, and in the event that a tenant needs to be replaced, they will be able to fill the property in a least amount of time.
How to Find a Good Property Manager
Now that you know what to look for in a good property manager, you are ready to go out and find one. As with most vital choices you will make in your life, it is always a good idea to take your time, weigh up your options and ask lots of questions. A good rule of thumb is that you should interview at least three property managers before deciding to move forward with one. During the interview procedure you want to get information on all the various things we just talked about. Find out how they market properties, how they go about dealing with bad tenants and evictions, how they handle property repairs and so on. After you collect all that information, weed out the ones that don’t match up with expectations, and then ask to speak with some references for each remaining property manager. Going through all this might seem like a lot of work, but it is work that will more than pay off down the road. Finding a good property manager is very critical to ensuring your success and sanity as a real estate investor.
Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com