Okay, you just purchased a rental property that you are certain will prove to be a good real estate investment, so now what? Now you must make the decision whether or not to turn the property management duties over to a professional property manager. This is especially true if you live outside the area and simply aren’t readily available to service the property, or rather not be tied down to the day-to-day operations a rental income property requires and prefer to spend your time on other activities.
For whatever reason, if you make the decision not to tackle the management duties and decide to turn your property over to a professional, then this one is for you; how to select a property management company to run your rental property.
To begin with, come to grips with the fact that a management company will probably not find it cost effective to treat your rental property with the same focus and passion as you. Resign yourself to the fact that you are hiring a business, not a baby sitter; and that your property has a better chance to succeed as an investment when run as a business, not as one of your children. Fair enough.
Therefore, concentrate your efforts on finding a management company that will contribute to your profitable bottom line and remain diligent to carry out at least three important functions on your behalf.
1) To 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) To 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) To 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.
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.