Who Should My Ideal Property Manager Be?

rent Does just the thought of hiring a property manager make your head swim?

Or maybe you hired a property manager in the past and got taken to the cleaners. It’s true that not all property managers are created equal.

Well, Cody Sperber on deck to bring you this lesson aimed at all you buy-&-hold investors out there…

If this is an area that’s been giving you fits, let me lay out a few pointers.

Is a Property Manager the Be-All End-All?

There probably isn’t a buy-&-hold investor out there who hasn’t at one time or another wondered about the advantages, or disadvantages, of a property manager.

Perhaps along the way, you’ve heard other investors say that this is definitely the be-all and end-all for your business. A property manager will lighten your load and let you get your life back.

I’d have to say that is sort of true, and sort of not true...

Take it from me when I say that a bad manager is much worse than having no manager at all. You can’t begin to imagine all the problems that a bad manager can cause you. (And you just thought a bad tenant was the worst…)

Keep in mind that a property manager is going to be entrusted with a sizeable portion of your business dealings. That means this manager has to be not only trustworthy but also reliable.

So where is this trustworthy, reliable person hiding?

Come Out Come Out Wherever You Are

Networking

Your first steps in locating that manager is to network with other investors. Begin with your local REIA meetings. This is where you’ll hear all the stories about property managers. Some are nightmare stories, others are the proverbial dream come true.

The best plan is to listen and learn. No need to get in a hurry. This team member is worth the time it takes to make a good choice.

manager Let’s say you receive a positive referral from one of your contacts. Still and yet, it’s not time to hire on the spot. It’s a good idea to interview several managers before choosing one.

Talk to Current Clients

If, instead of a direct referral, you learned about a manager in another way, be sure to ask for the contact information of their present clients. Take the time to call these clients, and make it a point to ask them hard questions.

Face-to-Face Meeting

Before hiring, set an appointment with your potential new manager at your property. Do a walk-through as you ask lots of questions. Let them explain exactly what they might do to bring the property up to its best use.

Credentials and Disclosures

You’re looking for a property manager who is licensed and also who has errors-and-omissions insurance. Ask for proof—don’t take their word for it.

You definitely want a disclosure of their fee structure. Make sure there are no hidden fees like:

Remarketing fees if a tenant moves out
Eviction fees
Commission fees if you sell the property during the time you’re using the property manager’s services
Repair upcharges

Ask about a la carte services. You may not want to buy all their services—or have to pay for what you don’t want or need. They should offer you a flexible plan where you select the services of your choice.

Your Responsibility

This is your business. That means it’s your responsibility to hire a property manager with a history of working with investors. One who has an effective strategy for finding high-quality tenants. And also, one who has an effective process that pre-screens all lookers who might turn out to be losers.

I can’t emphasize strongly enough how important the pre-screen process is. If your manager has this down pat, he’ll save you headaches while making you money.

In the same vein, does this manager know when to be lax and when to toe the line when it comes to rent collection? You need to know!

Trial Period

Once you’ve made your decision and are ready to sign a contract, have an addendum (or an insertion) that says you have the option to terminate within 30 days.

This way, if things go south (and he’s not all he was cracked up to be), you’re not locked into a long-term contract that you can’t get out of.

Your Surveillance

Even after hiring, your job is still not complete…

Yes, this manager is going to relieve you of a lot of stress, work and worry, but you still must stay on top of the situation. Never presume anything. Monitor your manager to make sure all your tenants and your properties, are being well cared for.

Require that status reports are delivered to you each month and on time. You need these reports to keep your finger on the pulse of your business.

Additionally, you should connect with your tenants to see that their maintenance requests are being seen to in a timely and efficient manner.

Bottom Line

A good property manager relationship will benefit that manager, your tenants and you. It all happens when you make a wise choice, and then follow up in a consistent, business-like manner.

Once you have this important team member in place, your workload will be considerably diminished. Divert that extra time toward tasks that will make you more money, rather than answering tenant calls at 2 am.