Finding the right property manager can mean the difference between having a guaranteed monthly cash flow and bankruptcy. That makes choosing a good property manager an essential component of investor success.
Your property manager may not necessarily manage the cashflow as you might. Therefore, it is essential that you screen any potential candidate as closely as you would a potential tenant. You must make sure that you use caution and research in order to select the right property manager. Never assume anything about a property manager.
Start By Asking for Referrals
You should begin your search for a property manager by determining the qualities that you want. It should be your goal to find something that is honest, organized and has the right experience. Asking for referrals is a good place to start when it comes to selecting a property manager.
You can begin by talking with real estate agents and other property owners. Find out which companies they have used or the individual property managers they have worked with. You should keep in mind that using a referral still does not necessarily mean that the person is right for you. The person making the recommendation might only be doing so in order to help out a friend or family member with a job offer.
It is not difficult to find property managers if you know where to look. A good place to start is with the Property Owners Associations in your local area. Most communities have such an organization and you can likely find your local version by simply using the name of your town/city and “Property Owners Association” as search keywords.
The National Association of Residential Property Managers (NARPM) is a good resource to find property managers in the U.S.A. because, not only does this trade organization issue certifications to its property manager members, the website also provides a searchable directory. In Canada, try the Canadian Real Estate Association (CREA).
If you are a member of a real estate investment club, you can also try asking for referrals there. However, the point is, that you need to gather at least a few qualified candidates for interviews. Don’t select someone until you’ve explored the multitude of options that are available, if you want to be successful.
After you have gathered a pool of potential candidates, you will want to determine if the property manager has the experience that you are looking for. If you expect personal attention to be given to your property, hiring a property manager that manages many properties or units, may not be the right fit for you. By putting together the right interview questions, you can eliminate candidates who aren’t the right fit more easily.
In addition, you will also want make sure that the interview process is thorough. Just because the property manager is a member of a trade organization does not mean they have the right experience. Asking the right questions will uncover this. Ask about their certifications and real world experience with managing properties. Have these questions prepared in advice so that you don’t overlook anything during the interview itself.
Having the right answers to your questions is important. In an article regarding the daily work lives of property managers, Brian Weaver, director of business development for Wilkin Management Group in Mahwah, New Jersey says that, “A manager builds ‘time cushion’ into the daily schedule in order to accommodate all incoming, unplanned tasks throughout the day.” Therefore, no two days may be alike for a property manager. Despite this, the candidate should still be able to provide a clear idea of how he or she will effectively manage your property.
If you are wondering what the right questions are to ask, start with the basics. During the interviews, you should pay close attention to the behavior of the property manager candidate.
- Does the property manger listen to what you say?
- Is he or she dressed professionally and conducting himself or herself in a professional manner?
- What the terms and agreements that the property manager is requesting, if hired?
You will also want to have a good understanding of how the property manager will deal with maintenance concerns. It is inevitable that property will require repairs or maintenance services, so you will want to evaluate how that property manager will make decisions because he or she will be spending your cash-flow. The property manager will also likely add a fee to invoices regarding maintenance concerns, which means that you will need to work with him or her in order to negotiate a rate that works.
Property Manager Agreements
The process of selecting a property manager can be exhausting. However, it is not okay to simply overlook the last part of the process, which is dealing with property manager agreements. It is important that you save your energy so that you can successfully negotiate terms that will favor your cash flow. You should also make sure that you draw up an agreement that clearly outlines the responsibilities of the property manager. Make sure that whatever you discuss and agree upon is put into writing. If you carefully consider each of these important steps, you will be well on your way to finding the right property manager.