When you own an investment property, there comes a time when maintaining the place yourself, or even having an on-site manager simply doesn’t work anymore. That’s because property management these days means more than just putting up a “For Rent” sign in the window and fixing the occasional leaky faucet. Keeping abreast of new codes and regulations is an increasingly difficult challenge, and being able to effectively navigate complex tenant issues while remaining within the law is often better handled by a seasoned professional who doesn’t let emotions interfere with reaching a successful resolution.
But with all the property managers out there, all with around the same fees and the same promises to give you great service, how do you even start to figure out which one is right for you and your property?
Here are five key points you should use when making your assessment:
1. Reputation with owners (not necessarily with tenants!): Check how long the management company been in business, and ask them to provide references to three owners whose buildings they’ve handled for at least three years. Ask these owners how responsive the firm has been (what kind of reports they provide, and how often), how well they’ve maintained the property, and how well they’ve maintained occupancy;
2. Ask for accreditation: Look at a firm’s participation in the local property management association – are they active, upstanding members? – and ask for accreditation by organizations such as the Institute of Real Estate Management (IREM), a national trade group that trains and certifies managers to ensure they’re up to date on best practices and all the complex rules, regulations, and laws that apply to rental housing in your community;
3. Look at their portfolio: Do they manage properties similar to yours? Just because a firm manages some prestigious office complexes doesn’t necessarily make them a good fit for managing your duplex. Or if they only manage new buildings, will they understand the quirks of keeping up a Victorian?
4. First impressions matter: Did the representative show up late or out-of-breath to your first meeting? Was it held in a parking lot of a shopping mall? Were they driving a beat-up sedan and wearing worn-out shoes or, conversely, an exotic sports car and way-too-shiny shoes? Your first impression of the manager is probably a good indication of how you can expect the business relationship to unfold;
5. Check the fine print: Review a copy of their management agreement. Is it straightforward and easy to understand, or is it full of jargon and confusing legalese? Conversely, is it overly brief and informal? A good agreement will use plain but still businesslike language, and be comprehensive enough to speak to most of the subjects and scenarios you can imagine might arise in the everyday management of a building and its tenants. Also ask them to provide a certificate of insurance with a provision for you to be notified if the insurance lapses.
Reputable, professional property managers such as Gaetani won’t take offense to these requests — they’ll see it as a sign that they’re dealing with someone as interested in a positive business relationship as they are. A good property management company not only maintains your building and your income, they work with you to increase the value of your investment over time while managing the myriad of risks that can make the difference between a great return or a big mistake.