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How to Find the Right Property Manager

Your experience with a property manager can make you LOVE or HATE real estate investing. Here are some tips for finding a manager that can make your experience as hassle-free - and still profitable - as possible.

Insurance Agent. real estate contract

  • Cheapest is not always best - As with many things in life, cheapest is not always best. Let's say you find a manager for your property that charges 9% where most charge 10%. Your property rents for $1500, so you're saving $15 a month, or $180 for a year lease, by choosing the least expensive option. But maybe there's a reason they're so cheap - you find that your property sits vacant for a week longer than the rental down the street. If it costs you $60 a day for the property to sit vacant (mortgage payment, utilities, lawn care, etc.), that $180 you saved on management has cost you an extra $420 in an extra week of vacancy. Sometimes you get what you pay for. That being said, be sure that you have a clear understanding of their fee structure, as some managers tend to nickel-and-dime clients for every minor thing.

  • Turn-over Rates - Nothing eats at your profits faster than a vacant property! A good manager will be able to optimize rent prices by knowing exactly what price to list a property for rent that will get it rented quickly to a great tenant AND maximize your profitability. If you see a property down the street that sits on the market for a few months during the spring rush, don't choose that manager!

  • Tenant Selection - Many landlord horror stories could have been avoided by better tenant selection. Sometimes a manager can get properties rented quickly, but they choose less-than-stellar tenants. Find out what their criteria is for tenant applications, and whether they perform background, income, and credit checks. Ask how many evictions they have had in the past few years, as evictions can be an indication of poor tenant selection.

  • Management-focused - Many real estate agents like to pick up property management clients as a supplement to their real estate commission income. I advise against choosing one of these agents. In the state of Texas, all property managers must have a real estate license, but I recommend choosing one that focuses almost exclusively on management. They are more likely to give their management business - and your properties - more attention.

  • Look for systems - A great property manager has their business running like a well-oiled machine. Ask them to walk you through the process a tenant would experience if they had a maintenance concern. Is there a 24-hour emergency line? Does the manager utilize technology to improve the landlord and tenant experience? What is the application process like? A great property manager has impeccable organization skills.

  • Communication skills - Communication is a very common problem between property managers and the tenants and property owners. Do they respond quickly to you AND your tenants? An excellent manager is great at conflict resolution. Find out if tenants are happy with the manager. Happy tenants means less turnover and more profitability for you!

  • Wants to Save You Money - Find a manager who uses competitively-priced contractors for maintenance, repairs, inspections, etc. Also keep in mind that your manager should also hire ONLY contractors who are licensed, bonded, and insured, to protect you from liability. You want your manager to save you money AND preserve the value of your property.

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