5 Traits Your Property Manager Must Have

Property Management Does the idea of managing a rental property turn you off investing in real estate?  If so, you’re not alone.

A recent national survey conducted by Opinion Research Corporation—the same firm that does polls for CNN—found that more than half of investors said they would definitely be interested in investing in a rental property if they didn’t have to be a hands-on landlord, and had the assistance of a reputable company to handle the selection, purchase, rehabilitation and management of rental homes.

Finding and overseeing a professional management company is a critical service that HomeUnion performs for its customers.  The boom in single family rentals has created a fast-growing business for property management firms in dozens of markets across the nation. These management companies make it possible for investors to move beyond their own local markets and invest where conditions are best for cash flow and appreciation.  It can be easy to get overwhelmed by the sheer number of potential management companies out there – this is where HomeUnion’s service comes in.  The companies that we work with have gone through an extensive vetting process so you can rest easy that your property is in good hands.  If you want to look for property management on your own however, below are 5 things you should look for when choosing a property manager.

Good Management Opens Up Distant Markets

A great management company maximizes the return on your investment by holding down repair and maintenance costs, keeping rents in line Remote Investing with local market increases, and above all, keeping your property rented to responsible tenants who will pay their rent on time and respect your property.

On the other hand, bad management can cost you dearly.  Poor maintenance reduces the value of your property, making it difficult to collect rents on time or raise rents.  A property that goes vacant for months at a time wreaks havoc with your bottom line.

5 Traits to Look for in a Property Manager

Tenant Screening 

The 80/20 rule of the landlord-tenant relationship dictates that 20 percent of your tenants will be responsible for 80 percent of your grievances and headache.  The added value a good property manager brings to the relationship starts at the very beginning, with a very thorough tenant screening.  Managers have access to the range of services that conduct credit checks, employment verification and criminal checks.  A credit report covers the past seven to ten years and reveals late or delinquent in paying rent or bills, including student or car loans, criminal convictions, lawsuits such as a personal injury claim, and more.  Are there discrepancies between an application and a background check?  What does their current landlord say about them?  Do problems surface when references are checked?  Are there red flags, like tenants who have sued landlords or been evicted?

A good management company has procedures in place that quickly vet prospective tenants and weeds out problems before problem tenants move in.  Ask how tenants are screened and the quality of their tenant population.  What percentage of rents is paid on time?  For more answers on tenant screening and management check out this guide on tenant selection.

Reputation

Just as a good management company has a variety of online tools today to check out tenants, the Internet offers a variety of handy tools to find out whether a company has legal or financial problems.

However, take tenant complaints on sites like Yelp with a grain of salt.  A few gripers may not represent the majority of a management company’s tenant population.  Moreover, complaints about rent increases, higher deposits and a no-tolerance policy with regards to late payments may be signs of managers who are taking good care of their owners’ interests.

Tenant Marketing

Single Family Tenants Craigslist can be an effective way to find tenants.  However, you’ll sleep more soundly if your management company is sophisticated at tenant marketing, with a variety of proven tools at their disposal.  Good property managers work with large local employers—such as company headquarters, universities, hospitals, and local governments—to provide housing for new hires.  In addition to having a good web site, they know how to use local and national rental sites.  They’re good at social marketing.  They also know that there’s nothing wrong with a good old fashioned yard sign, either.  Be sure you know what tactics your manager may use, because you will pay for them when the time comes.

Tenant Retention

How long single family rental tenants stay varies greatly by market and property type.  A national survey of tenants in 2013 found that single family home tenants are 25 percent more likely than apartment tenants to stay in their current homes five years or longer.  One out of four (26%) single-family tenant plans to stay in place five years or more, compared to one out of five apartment dwellers (22%).[1]

Retention clearly will have a major impact on your bottom line.  Even if you should be so lucky as to avoid a vacant month when a tenant leaves, you are going to incur some marketing costs to find a new one.

Review your management company’s retention record carefully.  Are they aggressively marketing to families and older tenants who are more likely to stay longer?  Or are they filling their properties with tenants who last only one or two years?

Another option to consider is guaranteed rent insurance that protects property owners against loss of rent for a relatively small annual fee.  Guaranteed rent policies generally don’t cover the first month that the property is vacant.  These policies are often sold with property owner’s insurance, which insures rental building and contents owned by the property owner.

Experience

Property management is a term that covers a wide range of specialties ranging from shopping centers and office buildings, to apartment buildings and single family rentals.  The difference between managing apartments and single family homes is significant.  Apartments have hundreds of tenants under a single room with common mechanical systems, centralized security and only a few yards of grass to cut and sidewalks to clear of ice or snow.  The same number of single family tenants are scattered all over town, each in unique structures with differing maintenance requirements and each with their own lawns and sidewalks.  Apartments have one owner.  The same number of tenants in single family rentals may have hundreds of owners.

,You definitely want a management company with extensive experience in single family rentals–someone who has systems in place to manage and maintain separate properties, and who knows how to communicate with a large number of owners HomeUnion Embrace Experience simultaneously.

The single family rental boom is only six or seven years old, and in its early years it was centered in a dozen or so markets.  Outside of those markets, in places like Las Vegas, California, Phoenix, Atlanta, Orlando, South and Gulf Coast Florida, the number of management companies that have experience in single family rentals are fewer, and most have less experience.  However, there are good companies out there who are ready to serve you.  As the owner of a single family rental property, it is extremely important that you do your own due diligence, and make sure the company you choose is capable of managing your property and handling your needs.

12 Comments

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Jackie Bell Jun 26 2016 - 11:27 AM
I am interested in knowing more about this. Now. I have a son and his wife I could work with.
    Alisha Chocha Jun 27 2016 - 9:03 AM
    Hi Jackie, Thank you for letting us know. Glad to hear it! I've informed your Solutions Manager that you want to learn more, and he will reach out to you soon. Thank you, Alisha at HomeUnion
Ridley Fitzgerald Mar 28 2017 - 1:04 PM
These are some great traits for a property manager to have. From a tenant's perspective, I appreciate when the manager screens those wanting to live at the property. I only want neighbors that I can enjoy living with.
    Alisha Chocha May 5 2017 - 1:53 PM
    Good point, Ridley! Thanks for sharing, Alisha at HomeUnion
Tomas Killington Apr 28 2017 - 10:31 AM
My father recently purchased a rental property. He already has a very busy schedule, so he's looking for a professional property management firm to help take care of his investment. I didn't realize how important it is to choose a company that has more sophisticated marketing techniques to ensure you get the best tenants possible. I'll be sure to share this information with my dad.
    Alisha Chocha May 5 2017 - 1:50 PM
    Hi Tomas, Yes, it is definitely important! Thanks for sharing. If he has any questions, feel free to have him reach out to us. Thanks, Alisha at HomeUnion
John Mahoney May 5 2017 - 9:04 AM
Thank you for talking about the importance of choosing a rental property manager that has experience with the type of housing you have. It makes sense that choosing someone like this can help you take care of your property and of your tenants. I would want to consult with the BBB and find a management group that knows how to communicate with me.
    Alisha Chocha May 5 2017 - 1:45 PM
    Glad to hear it! Thanks for sharing, John.
Marcus Coons Aug 2 2017 - 1:43 PM
I totally agree with you in that it is important to review a property management company's tenant retention rates before hiring them. It makes sense that doing this can help you always have your apartments with occupants and have a steady income from them. Personally, I would want to find a property manager that has experience with the type of work I need and who can use the best tools and software to make things easier for me and my tenants.
Jessica Laurent Aug 16 2017 - 10:59 PM
Tenant screening and tenant marketing are the two important traits that every property owner should look into a property manager. As we know that, every landlord who wants to rent their property needs a reliable and responsible tenant.
Ridley Fitzgerald Aug 29 2017 - 10:47 AM
I love the advice you have for hiring a property manager. We're looking at hiring one, because we want to rent out our vacation home. I don't know how to rent a property out, so finding someone with extensive experience is definitely important to us.
Ernest London Sep 22 2017 - 12:37 PM
I like that you mentioned that a good property manager will have great strategies and success with finding the best tenants. A good marketing strategy could be a big part of why people choose an apartment. I am considering buying some real estate to rent out, and I want to know what I would want in a property manager if I ever did. I will definitely keep these things in mind, thanks.

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