Beginner’s Guide to Working with a PM Company, Part 1
Hiring a good property manager can be the key to scaling up your rental investments. Working with a property management company frees up time for landlords to focus on growing their rental portfolio, rather than on the day-to-day business of tenant screening, property inspections, and maintenance issues. So if you self-manage and you’re looking to increase the number of properties you own, chances are that eventually you’ll have to hire a PM Company to help you manage your rental business in the future.
For those who want to receive a passive income from their rental properties, having a great property manager is pretty much essential. However, due to the low barriers of entry in the property management industry, the quality of service that you can expect may vary widely from company to company.
In this 3-part guide, we’ll give you all the information you need to find a reputable PM Company in your area, as well as tips on how to get the most out of your relationship with your property manager.
In Part 1, we’re looking at the qualities you should look for (and what to avoid) when researching potential PM Company for your rental business:
Good communication is absolutely essential for landlords to have a successful relationship with their PM company. There are many issues outsde the full control of PM companies and owners, but communication is not one of them. So, if a PM company is unresponsive or miscommunicates with you in the early stages of the hiring process, when they’re still trying to entice you to become a customer, this is a major red flag and is probably indicative of what will happen after you hire them, too.
When you send your initial inquiry make a note of how long it takes them to reply to you. How responsive are they to subsequent emails or calls? Do they get back to you within 24 hours? If you have a mail tracker, you can also look at how long your message was “seen” before the PM company actually sent their reply.
The ideal property management company has a well-rounded and capable team of employees. A company with a shortage of manpower will be limited in how much time they can dedicate to managing your property. Another thing to look for is that they have in-house maintenance or repairs teams, as they will often have faster response times to maintenance issues..
There are many different ways for a PM company s to deploy their resources, so to evaluate if they have enough manpower or not, ask about their organizational structure, who handles what, if they’re setup by departments or assign owners to specific property managers.
It’s a good sign if the PM company you’re considering has a highly-qualified staff, but you should also look for a company that has extensive experience in your specific market. It’s therefore important to find out how long the company has been operating, and what their area of specialty is – for example, if you own SFRs, look for a property manager who specializes in this type of rental home.
Make sure that the company has at least a few years of experience and has had several other clients. Find information on the company’s history, and any reviews of their service by other landlords, to get insight into how they’ve operated in the past. An in-depth search of their digital footprint could save you a lot of headaches in the long run.
Knowledge of the Area
If your goal is to be more hands-off in your rental business, you need to make sure that your PM company is capable of solving any unexpected issues that may arise with the property or the tenant. To do this efficiently, they must be located near the property or have someone from the company in the area.
Make sure you can find examples of properties managed by that company in your local area – if you can’t find any, ask the PM company to supply some. Watch out for companies that try to hard-sell you, but don’t have a lot of past experience in your neighborhood or are located far from the area.
Organized & Written Processes
Do you want an organized PM company or one that makes it up as they go along? Many PM Companies check off all the areas above, but then fall flat when it comes to being organized and having written processes in place. Both are needed to provide acceptable service and you should investigate by asking for proof. What information do they offer on their website about their processes? What can they quickly (so they aren’t just making it up) email you a written process or two? How much detail can they go into over the phone with you?
Keep an eye out for Part 2 later this month, where we’ll be giving you tips on what to ask when interviewing a Property Management Company and how to do more in-depth due diligence on your top picks
Image Courtesy of Christina @ wocintechchat.com