Property investments have been increasing for several years, but owning a rental property can be a serious challenge. Whether you own residential or commercial property, buildings and tenants alike need continual care and attention. Addressing all of those concerns, though, requires a serious time commitment. Fortunately, a property management company can help alleviate the time you spend in a hands-on capacity with your property. If you’ve never worked with property managers before, though, learning how to choose a property management company can be fairly complex.
Why Work with a Property Management Company?
Good management can help an investment property retain its overall value and appeal more to potential tenants. A property management company is the ideal group to handle your property if:
- You’re looking to save on costs and increase revenue. Most people think of hiring a property management company as an expense. But the benefit of working with a good property management company is that it should more than pay for itself through rental increases and expense reductions.
- You have concerns about the time commitment real estate investment takes. If you don’t have time to personally manage the property or it is simply consuming too much of your time, the ROI may not be worth it.
- You hate the management side. Not everyone wants to handle marketing, maintenance, and tenants. Perhaps you don’t have the maintenance skills or the marketing resources to be able to manage the property effectively.
- You live some distance from your property. If you’ve purchased a property in another city or state because it provided you with a great price or location, you may not be able to manage it well from your present location.
- Your portfolio is simply too large. If you have several properties, personally managing all of them can be a challenge.
If you fall into one of these categories, hiring a property manager simply makes good sense to ensure the value of your investment. The team you hire will oversee building maintenance, day-to-day operations, and marketing to ensure your property becomes the passive income opportunity you’d initially wanted.
How to Find a Good Property Management Company
Learning how to choose a property management company isn’t an easy task. After all, they will essentially be the face of your brand, so you want to select a team that aligns with your values. Start your search at the local level. Connect with other investors or real estate agents who know property management teams that serve investors in your area. You want a team that is aware of federal and state regulations, but local concerns as well.
Next, consider property management firms that specialize in the area and properties you are interested in. Most groups will work with commercial or residential properties, and some do both. You want a group that understands your properties. Choosing a team that works well with apartment complexes in a given area may also be able to help you add to your portfolio of single-family homes.
As you begin to make a short list of companies to meet your needs, look at the experience each team brings. In the world of property management, experience means a network of resources that can help your company handle any potential problems from maintenance issues to tenant concerns.
You’ll also want to begin your due diligence in terms of licensing, insurance, and affiliations. They should be respected members of key property management organizations, and they should have liability insurance that will help protect you.
Finally, consider their documentation. Look at a sample agreement to determine their current monthly management fee structure. Learn more about their responsibilities, the exit clause, and what might happen should you disagree with them in the future. You should also review the tenant lease agreement to ensure it meets your values as a landlord.
A Critical Choice
Finding out how to choose a property management company to protect your assets is a big decision. What sets us apart is that we are investors too, so we know what to look for, and we look at our clients’ investments the same way we look at our own. Carefully complete your research before you select a team that meets your needs. Contact us if you want to have a conversation about how we can help you.
