Investing in rental property is one of the best ways to make a substantial passive income in theory, but in practice, that income stream often isn’t as passive as you thought it would be. If you have one primary rental property, managing it may not be too difficult. That’s why you need a property manager that can assist you in managing and maintaining your properties.
Also, if you own properties that you rent to low-income tenants in exchange for government money; it can get even more complex.
That’s why a lot of investors will pay professional property managers, but how do you choose the right company? It’s a big decision because ultimately the property manager or firm you hire is serving as your surrogate and making sure you’re earning money from your properties and that your tenants are satisfied and taken care of.
The following are some things to keep in mind as you research property management companies to find the right one.
While you can theoretically ask for referrals to find a property manager, this can come with its own set of problems. Most often you’re going to get biased reports from people, and unless you hear the same type of things over and over, it can be tough to know the reality.
Online searches are a good option because you can quickly narrow down your search based on exactly what you’re looking for. This can cut out a lot of unnecessary searching for the right company because you’ll go ahead and eliminate the managers that don’t specialize in what you need.
You need a property manager who ultimately knows more than you. You need to make sure they have experience in the particular area you’re looking for because managing single family homes aren't going to be anything like managing commercial properties, as an example.
Look at Their Current Properties
Don’t be afraid to ask to see the current properties that the company is managing. You want to see how they’re being marketed and advertised, how well maintained they look and you can also talk to tenants and see how happy they are with everything.
Properties vs. Resources
A property management company may seem like they’re great if they are responsible for a lot of units, but if they already have a lot of responsibilities, do they have the sources to continue adding to that? Do you think that a property management firm with just a few employees will be able to add your units to what they already manage?
Most estimates show that one well-trained employee can usually manage around 30 units, so keep this in mind as you’re choosing.
Do They Own Properties?
Finally, during the selection process, you may want to know if they also own properties. A lot of investors may want a property manager that owns properties because they’ll feel like they understand where they’re coming from, but at the same time, it may put you in competition with your property manager when it comes to filing units.
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