Educational Resources

How To Find The Right Property Management Company

Real estate investments are large financial commitments, often comprising a major portion of an investor's net worth. Those who are not inclined to personally manage property should consider outsourcing this task. Some investors find that while their strengths are in sourcing property, negotiations, or deal making, they are less interested in the management responsibilities that follow afterwards. These owners do best when they partner with an effective property management company to oversee their assets.

The question then follows: How does a real estate investor distinguish the difference between an first-rate property management company and mediocre one? Property management companies list nearly identical services on their websites. How does an investor qualify who performs these services the best?

Below are questions to ask yourself when searching for the right property management company:

1. Does the property management company make a plan specifically for you? Do they understand your goals? Do they understand your exit strategy and the role they play in that strategy?

2. Is your property management company financially aligned with you as an investor? Does your property management company make money when you don't, or make money while you lose it? Do they act as a vendor or do they partner in your financial success?

3. How are their fees structured? Do they charge a low monthly percentage, but then tack on additional fees? Rule out the cheapest and most expensive bids. The cheapest is cutting corners, and the most expensive is working inefficiently.

4. Are you working with experienced people who are committed to property management? Is property management the focus of the firm or is it seen as an additional revenue stream? Many real estate agencies will add property management to their list of services in a down market when sales become slow and erratic.

5. Has the property management firm outlasted down markets (e.g. 1990-1997 and 2007-2012)? Do they create value during these down markets?

6. In terms of managing your own properties, what is your time worth? What are your strongest skills and where are they best applied? Property management done right is labor intensive, detail oriented, focused on service and requires a significant level of people skills.

7. Does the company use state-of-the-art technology to run their property management engine? Does their website look cheap, as if it was created to put the company in business quickly? How does their website reflect how they will treat your property?

Based on our 30 years of experience competing in the property management industry, we have developed unique and effective strategies for real estate portfolio management.

 

---

 

 

comments powered by Disqus