By Operations Team. For more information, contact Robert Parmar
Owning property is a proven way to increase your personal wealth. Not only do you own a physical asset, but you can also improve that asset to make it worth even more when you sell it at a later date.
Rental properties are considered a smart investment but there is a negative side to owning rental properties.
Becoming a landlord
Your life is probably busy enough without the hassle of having to make sure an entire property or properties are running smoothly. Your own household is enough to handle, let alone hundreds of others in a multifamily building.
There is a great solution.
Hire a property management company
Those words might make you cringe, thinking you are about to spend your revenue on a company that does what you can. What good is having rental income if you have to spend it all on someone else managing your properties?
The value of an experienced property management company is worth more than you might realize. Of course, a company will, hopefully take the stress off your shoulders and take care of issues while you’re with your family or on vacation but will that really happen? Or will you find yourself managing the company who manages your properties?
The right management will make your life easy and take off the stress. But how do you find that company?
The agents within the company should have education, certifications, and licenses. Depending on your state, they will need to have a real state license. Even if your state doesn’t require a license, they should have classes and certifications to demonstrate they understand the process and how to excel. You want to know they are staying up to date on the latest laws, trends, and have a strong understanding of property management
Choose a company that the public likes. Their name will be advertised at your property as the management company. If they have a negative reputation in the area, potential tenants will avoid the property to avoid the company.
Your property is in a class. Generally, those are A, B, C or D class, categories with Class A being a more luxury based multifamily property. You want a management company with the experience in that class. They will have a proven method to showings and conversations with tenants. They will know how to handle maintenance requests and how to manage a property with higher expectations. Thinks of a 5-star hotel versus a roadside motel. Both are important and serve a purpose, but the expectations and service methods will be different.
When you talk to a management company, you should be able to see and feel their strong and positive customer service. They should “wow” you right away with their returned phone calls, timeliness for interviews, and their professionalism.
A proven management company will have vacancies, every property has vacancies, but they won’t last long, and they won’t be a problem. A vacant apartment is losing money so high occupancy rates are the goal. As residents move out and units are vacant, does the management company turn-it over and have it leased quickly? This might mean negotiating move-in rates for the first month or adding an incentive. An experienced management company will know how to do these negotiations, so loss of profit is minimal, and the units stay full.
You want a company that will be firm with rental deadlines and general community conduct. They won’t be rude and unreasonable, but the rules explained out in the rental agreements will be enforced. This is to create a strong community where everyone has a safe and decent place to call home. Policies are necessary and as a property owner, you might not know or understand why certain rules are important. An experienced manager will know that information.
A strong manager will have the necessary connections to get the job done. When the AC is out in the summer, your management company should have a relationship with HVAC companies who will prioritize their call. They will also know who to call at the local offices for help with laws and changes. When your manager is connected, things get done around the property and costs are usually decreased with a good staff. The HVAC company knows they will have repeat business so will offer better rates and that helps your profit.
A strong management company will know what works for various types of properties. Student housing should be advertised at the local colleges and on social media while the 55+ communities should be advertised on Facebook and maybe at the local senior center. Those are just two general examples of what the management company will know in order to keep the property full. They will know the market demographics and target their efforts for maximum results.
Having a strict process ensures important documents aren’t missed, community rules aren’t overlooked, and discrimination is less likely to happen. The rental process has steps that can’t be missed and a company with a clear process is important. An example of this would be when the company requires a form to be filled out before showing a unit or insists that the applicant has two, reachable references as well as a job with income requirements, and a certain credit score range. By requiring the same thing from each applicant, as well as from each resident, the processes of renting can be streamlined and fair for everyone who applies. Every employee within the management company will know the rules for leasing as well as how to handle problems.
Choosing the right management company is vital to the success of your investment. It is crucial to interview the management company objectively and make sure you interact with each person who will be involved with your property. While the rates will fluctuate, a higher price doesn’t always mean better service. Find the company that suits your property the best.
When you’re ready for a better Property Management experience, give us a call! Convenient online booking is available below.