When You Turn Property Management Duties Over to a Professional
Property management is a duty that all real estate investors must confront once they take ownership to a rental income property. Whether it's a single-unit or a multi-unit property, multi-family or commercial office complex. property management cannot be ignored. It all boils down to whether or not the investor wants to handle the duties themself, or to turn the property management duties over to a professional property management company.
The investor's decision to handle the day-to-day management often occurs if the property is small (just a few units), and the owner has the time to deal with it. On the other hand, it's more common for owners to turn the property management duties over to a professional if the property is large (multiple units), the owner rather not be tied down to the day-to-day operations a rental income property requiresprefers to spend his/her time on other activities, and/or the owner lives outside the area and simply isn't readily available to service the property.
The tips suggested in this article are adressed to the latter: to those of you who have made the decision not to tackle the management duties and decide to turn your property over to a professional. It is not intended to be exhaustive—just a couple of points to help you get started on the right path.
What Not to Expect
Resign yourself to the fact that you are hiring a property management business that will probably not find it cost effective to treat your rental property with the same focus and passion as you. On the other hand, find solice in knowing that your real estate investment has a better chance to succeed when run as a business.
So concentrate your efforts on finding a management company that will contribute to your profitable bottom line and remain diligent to carry out at least the following three important functions on your behalf.
What to Expect
1. Keep your units rented at market rents. Having an apartment full of tenants will do nothing to contribute to your profit unless they are paying the same amount of rent that other renters are paying for similar units down the street. You should expect a property management professional to keep on top of market rents and see to it that the rents charged for your rental property units do not lag behind.
2. Maintain as little vacancy as possible. This requires the ability to keep good tenants in your building and the skill to draw in new tenants in the event of a vacancy. You want to be assured that your property manager attends to issues that might concern your tenants such as repairing a faulty light switch or appliance or perhaps a neighboring tenants' excessively-loud music. In the event of a vacancy, you want the company you hire to proactively get the unit ready to re-rent, advertise it for rent, and then become available to show it to prospective tenants.
3. Control the operating expenses within budget. You certainly want your property management professional to keep your rental property in service by seeing to it that the operating expenses are paid in a timely fashion, but likewise are responsible to maintain those expenditures within a predetermined budget. If the manager feels at any time that the budget has become unrealistic, then you should expect to be notified immediately so it can be discussed and reconsidered.
Rule of Thumb
There are numerous ways to locate enough property management companies willing to manage your property for you to interview. You can look in the yellow pages or rental section of your local newspaper, ask for suggestions from a real estate agent or other rental property owners, or just drive around and look for signs. It shouldn't be difficult to select one you deem reliable. Here's to your success.