If you are a real estate investor who plans on buying and holding real estate, then property management is absolutely key. This vital function takes care of all of the day to day aspects of property, from maintaining the piece of property to collecting rent from tenants to all of the marketing efforts needed to keep the property rented.
The first thing you are going to need to decide is whether you are going to manage your property on your own or you are going to outsource it. Hiring a firm to do the daily management for you frees up your time so that you can focus on the investment side of things. The following are some important tips on how to find a good property management company.
The first thing that you need to determine is how long the firm or individual has worked in property management. Are they new to the field or have they worked in the area for a while? If the firm has been in business for some time, then there is a good chance that the word will have spread throughout the community that the individual or company rents apartments or is good to work with.
The second thing is to check to see what Angie’s list says about the property management company, what the Better Business Bureau says and other review sites that are online. Also check to see what other real estate investors have to say about the property managers. Be sure to talk to their clients, and especially out of state owners. See what their clients have to say about them. They should be able to provide you with at least half a dozen reference who will be able to say, yes this property manager is great, I received all of my monthly reports right on time. All of the rent is collected and they provide my tenants with all of the services that they need. It is important that the property management company be able to give you several good references.
The property manager also needs to be hands on. They need to be located close to where your property is so that they are available to show the house or apartment whenever necessary. They also need to be marketing your property on a continuous basis.
It is also very important that the property management company qualifies the tenants they are placing in your property. They need to do a nationwide background check. There are many different services that can be used for this. The background check is critical, to ensure the prospective tenant isn’t a felon, sex offender or someone who has skipped out on their rent. Maybe they have all sorts of things in collections, which can be an indication that they will have a hard time paying their rent.
Property management is absolutely critical since that is what manages your cash flow. So you either need to find a good property management company to do this for you, or if you are going to do it yourself, then you will need to dedicate yourself to mastering property management, since it is absolutely key to investing in real estate successfully.
