Top 5 Considerations When Choosing a Property Manager
Hiring the right property management company is critical to the success of residential real estate owners looking to rent their properties, whether apartments, condos, or single-family homes. Once your tenants have signed the lease and moved in, they will most often interact with the property manager, who will inevitably become the face of your company, whether employed directly by you or by a third-party management organization. Therefore, it is important to choose a company, which will deliver top-notch service to your renters time and again.
Making this decision however may not be an easy process as there are dozens of property management companies in most large cities throughout the country. The below list of top 5 points to consider when choosing a property manager will help you narrow your options and hopefully make the right hiring decision.
1. Choose Local vs. National Property Management Companies
While hiring a well-known national organization may sound tempting, a smarter decision would be to consider local prospects. These property managers are already familiar with the local market and its specific laws, regulations and potential issues. For example, a
California-based company will be way more experienced in responding to natural disasters such as earthquakes and wildfires than a company based on the East Coast.
Additionally, local property managers will already have an established working relationship with vendors such as plumbers, HVAC contractors, roofers, landscapers and handymen. They are more likely to negotiate better service contracts and pricing, and will be able to respond to the needs of renters in a timelier fashion. Local representatives are able to pop in and visit with your customers on a regular basis rather than only once a quarter or when something needs repairs.
2. Level of Professionalism Is Subtle but Critical
While this is true for any industry, professionalism is key in residential real estate property management. Handling requests with respect and the appropriate urgency is very important for keeping the tenants happy and increasing the likelihood of them continuing to rent from you. Assessing the professionalism of a company may be tricky as everyone tries to make the best impression during sales pitches. However, there are other subtle ways to differentiate true professionals from questionable companies.
Are phone calls to their office answered immediately or returned promptly? Is the organization a member of property management associations such as NARPM (National Association of Residential Property Managers)? Do they participate in local networking property management events? Once you take such facts into consideration, it will be easy to spot the true professionals in the business.
3. Request Maintenance Plans and Pricing Proposals
When comparing property management providers, you should also consider their maintenance plans and pricing. A reputable company eager to earn your business, will not hesitate to provide you with a proper bid proposal, featuring details on their maintenance request procedures, quarterly and annual inspection schedules, list of approved vendors, property manager and maintenance staff profiles, portfolio of other properties they manage, and last but not least, the pricing structure for their services.
Once you have narrowed a list of prospects, you should request written proposals from all of them, and schedule meetings in order to get introduced to the property manager who would be directly responsible for your property if hired. How a company responds to such proposal requests is also a telltale sign of the level of professionalism you can expect from that organization.
4. There Is No Substitute for Experience
While low fees, fancy proposals and professional presentations may be enticing, do not forget to take into account the actual experience a property management company has under its belt. Things to look for when evaluating experience is the number of years the company has been in business, the size of their current and past management portfolio, the length of the property managers’ careers, and the types of emergencies and natural disasters the company has worked through in the past.
Real estate management is a complex industry and you do want well-seasoned professionals by your side when the need arises. If you do choose to work with a new or less experienced property management company, be prepared that they will be learning the hands-on aspects of the business on your time and dollar.
5. Research Online Reviews and News Coverage
In today’s digital day and age, it is almost impossible to hide a bad reputation. A quick search on Google or Yelp can reveal a wealth of feedback on any company or service provider and property managers are no exception. A lot of people take the time to write detailed online reviews of their experiences so you will most likely come across many examples of how a company handled certain circumstances for other tenants. While positive reviews may be more pleasant to read, you will gain a lot more perspective from the negative ones, although remember to take those with a grain of salt as disgruntled customers sometimes tend to exaggerate their stories.
Another good source of objective reputation information is local news coverage. You can search Google for past newspaper articles that covered or mentioned the company you are considering. If the organization was involved in any questionable business practices or situations, there is a pretty good chance that the local media talked about it.
Hiring the right property manager certainly requires a good amount of research and consideration, however the time spent on this process will be well worth in the long term. We hope that our list of top 5 considerations will set you on the right path of making this important decision as a property owner. Last but not least, remember to request that a termination clause is included in any property management agreement you sign. Such a clause will allow you to terminate the contract within 30 to 90 days of providing a written notice, in case things don’t quite work out as you expected.