One of the great parts about investing in the real estate market today is you don’t have to be restrained by your location. In the past, the majority of individual real estate investors did so in the general region where they lived, or in another region of the country where a trusted partner of theirs lived.
Nowadays, though, with the advent of companies such as HomeUnion®, individuals have the advantage of being able to invest in the real estate markets that make the most sense for them. It has become easier to invest in real estate across the country, much like it is to invest in the stock market for companies that are located around the world.
One of the added challenges of doing so this way, though, is it requires investors to outsource the management of the property. While some of the tasks that a property manager will handle could be done by a local investor, it becomes very difficult to do so from afar.
While most investors will spend a lot of time finding the right property to buy in the right market, and vetting tenants to ensure their home is occupied by the right people, they often overlook the importance of finding the right property manager. This would be a mistake, as your property manager will handle some of the most crucial aspects of your investment, including:
- Collecting rent
- Handling repairs and general maintenance
- Responding to tenant inquiries and complaints
- Marketing your property to potential tenants and showing them the property
That’s why it’s so important that you hire a responsible, reputable and trustworthy property manager to handle the day-to-day duties that you can’t handle as an investor, but that need to be done. So, how do you find a property manager that will be good for you?
Here are five ways to identify a good property manager.
1. Ask for Referrals of Property Managers
One of the best ways to hire a property manager – or any contractor, for that matter – is to ask for referrals from other trusted sources in the region. On a personal level, this may include the real estate agent who helped you find your home. It’s likely that he or she (or their real estate brokerage) has at least one property manager they can suggest based on past experience. You may also want to check with other people you know in the region, or other property managers through a networking group.
It’s a good idea to get as many referrals as you can from a few different sources. This will help you weed out any bias a person may have and also give you the opportunity to rate the referrals you get. For example, if one particular property manager appears on each of your sources’ referral list, there’s a good chance that company is worth looking into.
Ultimately, what you want to know is not just what property manager they would suggest, but what the property manager does well and what, if anything, they don’t do well.
2. Search Online for Property Managers
The Internet is one of the most powerful tools you can use today. It’s likely that you used the Internet as the primary means to find your real estate investment property in the first place, so why not use that same tool to search for your property manager?
You can do a general web search for property managers in a particular area to get a preliminary list. There are also websites dedicated to finding property management companies such as AllPropertyManagement and Rex Global where you can search for property management companies in an area based on the size of your property.
3. Vet Property Managers Online
Once you have identified a handful of property management companies you’d like to consider, it’s time to whittle down the list. The first step in this process should be to use information that’s readily available online.
It’s easy to find reviews on property management companies through sites such as Angie’s List or Yelp, but you should also consider looking the company up on social media sites such as Facebook. All of this could provide insight into a property manager’s dealings from the customer’s standpoint. You should take these reviews with a grain of salt, though, as it’s possible for some companies to load these sites with positive reviews to hide the bad ones.
One additional online resource could be the Better Business Bureau. There, you may be able to see if the property management company has a rating and if anyone has filed a complaint against them.
It’s also important to know whether the property managers have certifications with trade organizations such as the Institute of Real Estate Management, the Community Associations Institute, the National Association of Residential Property Managers and/or the National Apartment Association. A lot of reputable property managers will be certified with these or other industry-specific organizations.
4. Interview Property Managers
Once you’ve vetted potential property managers using online resources, the next suggested step is to interview a pool of about five. If possible, it would be best to conduct this interview in person so you can get a sense for not only the company that will handling your property’s affairs, but the people behind it. If an in-person interview is just not in the cards, then a phone or video interview will suffice.
Some topics you should discuss include:
- Their experience and education
- Their knowledge of local laws regarding landlords and tenants
- Their current client list
- How they handle tasks such as screening tenants or dealing with a dispute
- Their plan for how they’ll find and retain tenants
- Whether they play a role in determining rent, and if so, what they would charge for your property
This interview will give you a good feel for not only how well qualified a property manager may be, but also how well they are able to communicate with you. Clear communication will be essential in your relationship, especially since you won’t be located in the same region.
If you are able to conduct the interviews in person, it may also behoove you to visit some of the property manager’s current clients to see how well kept the properties are. If you’re able to speak with some current tenants, too, it could provide you with extra insight you wouldn’t be able to glean from remote interviews.
However you conduct them, by interviewing multiple property managers and discussing the same topics, you’ll be creating a comparison checklist for yourself.
5. Examine the Property Manager’s Agreement
The final step in the process of finding a property manager is to thoroughly examine the contractual agreement between you and the company. It is very important that you understand clearly what the duties and responsibilities of the property manager will be, what fees they will charge and for what, and any other terms of the agreement. This should all be clearly written out in the agreement.
Some items of particular interest include:
- Their monthly fees and what those fees include
- Any additional fees for add-on services
- Your personal contact at the company and multiple ways to contact them
- The terms of renewal and termination of the contract
- How they will handle repairs – either themselves or by outsourcing to a handyman
- How and when you will receive your monthly rent
- How they will handle a potential delinquency or eviction
- What is expected of you
If there are areas of the contract that concern you or that aren’t explicitly laid out in writing, the time to ask questions and/or request changes is before the contract is signed.
What you are looking for is not just what the details of the arrangement are, but also whether what they told you in the interview matches up with what they presented you to sign. It should be a sign of caution if their word doesn’t match up with their writing.
Be an Investor, Not a Landlord
There are many benefits to investing in the real estate market, especially today when it’s so easy to do so in regions around the country. While the idea of real estate investing sounds attractive, many people shy away from doing so because they think it’s expensive to do so, they don’t know how to identify a good investment, and they have to be a landlord.
By partnering with a company like HomeUnion®, individuals can remotely invest in the best real estate markets around the country from the comfort of their own home. HomeUnion® provides a wide variety of online research tools to help you find a great property in a hot market.
In addition, HomeUnion® debunks common real estate investing myths, and can teach you how to be an investor, not a landlord. Once you’ve made your initial investment in real estate, HomeUnion® can also help you search for a certified property manager to manage your rental.
They can match you with one of their trusted property management partners based on your property’s location and your needs. All of their partners are legally compliant and in good standing, have formal systems and processes for operations and reporting, have a good track record of performance and offer competitive pricing of services.
To find out more, visit us online or call us at (866) 250-5610.