Monday, July 20, 2015

Checklist To Evaluate A Property Manager

Being a landlord has various forms of work that feel like drudgery if you do it all alone.

Whether you're a private landlord or on an HOA board, finding a valuable property manager that can ensure day-to-day operations, reduce costs in your budget, deal with legal compliance, market the property and effectively maintain the property; is not an easy feat.

Check The Techniques Of A Property Manager

Amidst the requirements for overseeing a property, it is just as important to evaluate a property manager's financial reporting skills, salesmanship, property maintenance tactics, and analysis or track record of tenants that they have approved to live within your rental units.

Learn how to accurately determine the right property manager with these tips:
  • Don't Cast a Wide Net for Potential Hires
  • Expect a Balance of Salesmanship and Marketing Experience
  • Understand Local HOA & Legal Compliance
  • They Know How to Handle Maintenance Issues
  • Quality Tenant Screening Tactics
  • They Have Reasonable Service Fees

Don't Cast A Wide Net For Potential Property Managers

You should always do your research and look for recommendations of who have a great track record for handling such demanding responsibilities in an expedient manner.

The National Association for Residential Property Managers can help with this, too. But you do not want to scout numerous property managers like a professional sports leagues's draft with multiple rounds. Keep your goals simple for profitability, and keep your pool of property manager candidates narrowed.

Salesmanship and Marketing Experience

Some people are better than others when it comes to the art of persuasion, or have charismatic personalities. You need a property manager that knows the rental units and the local real estate market in order for them to sell well to tenants in a competitive real estate market. 

Have they shown properties before? Are they knowledgeable of what it take to advertise rental units? What communication methods with tenants regarding condo fees have they used into the past disseminate that important information to the residents? How well do they know the local real estate market in that side of town where your property is located?

These are all important questions to have as part of your criteria for hiring your next property manager. Make sure they have an excellent customer service mentality when dealing with tenant's problems that may arise. This will also be conducive to overall morale and culture amongst occupants within the property, and add market value to your investment in the long term. You can't afford to have the residents feel as if they are victims to a slumlord in any capacity.

Understanding Legal Compliance

There are many intricacies when it comes to dealing with real estate law. Certain states have different by-laws when it comes to property ownership. Also, they must know fire-safety regulations for example how you use mulch on the property grounds. 

If you are on the board of a condo or homeowner association, you should see if they know how your HOA voting process works and how they have carried out new rulings or policies from the HOA board. If they do not have this type of experience, they you could be bound for a legal disaster, and being in court can be costly against your investment plan for the property.

How Well Do They Know How To Handle Maintenance Issues

There is always something that comes up at random when it comes to property repairs. Property managers need to be as expedient as possible for random breakdowns of radiators during the winter, assessing flood risks to keep the resident's items and well being safe, hot water heaters not working for the rental units shower, etc.

Property managers usually have a budget for cash to carry out repairs. It is crucial to pinpoint how the property manager will use this budget and keep the regular maintenance costs under control, or evaluating damage control issues for move-in/move-out day at the end of rental leases,  

Tenant Screening Tactics

As the Boston real estate market gets more expensive and the demand for rental units continues on the uptick, the tenant screening process is becoming more essential than ever.

In order to be profitable, you need to have a property manager who can take the time to have a keen sense of who should be occupying the vacancies, and who will not give you problems when it comes time for monthly rent collections. 

Credit reports are great to use for this evaluation, but also finding out what methods and turnkey resources that the property manager uses for researching the tenant's work and landlord history for good referrals is necessary as well. 

Evaluate The Property Manager Service Fees and Accounting

Most property managers charge between 6% to 12% of the monthly rent for their services. This ties back to the first point of doing your research on property managers: know the range of percentages that property managers in your community will charge.

For example, if you have under 50 units in your HOA or as a private landlord, then you may not be able to attract a top tier property manager because you simply won't have the budget to pay them.

Perhaps in this case, you may want to hire a property manager that is not as expensive for their services. Or if you do have that many units and are looking for a property manager that caters to the lifestyle that you want to present for your HOA, then you must learn which can account for the condo fees and liability insurance requirements to help protect you from potential lawsuits. Plus, see what they know about budgeting for advertising costs for the vacancies.

As a property owner, it is mandated that you report your taxes to the Internal Revenue Service.

Therefore, ask if they have experience assisting in these filings of the required forms with property owners and landlords. The goal is reaching a profit, so you must have a person that is, if not, more financially literate than to make this happen smoothly as possible

Evaluating a Property Manager - Final Thoughts

Have you had any experience hiring the wrong property manager? What do you think your mistakes where in dealing with the wrong hiring? If you have great experience hiring a property manager, what did you use for an ample criteria to make the right decision?


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