multi-family, looking to outsource property management, upstateNY

[Joshua B.]

First time poster and long term investor!

My LLC (small partnership) has been renting a 8 unit property in Rochester NY for the last year. We have been self managing, with OK results, as I am located out of state and my team is small family run. The tenants have a relatively high turnover rate. This type of area and there are some low income tenants and some on government assistance, so finding good tenants can be tricky. Basically has a decently high tenant turnover. We also accept section 8 and tenants on government assistance, which can sometimes be good as it is guaranteed income, but can also be not so great as usually these type of tenants have some issues staying up on rent payments. Many of the tenants have very little technological know-how, so going to a strictly digital management solution is likely not a great option.

We are trying to start expanding over the next year and are looking to outsource some of the property management as we want to start getting some real estate qualifications and also seeing and offering on new multi-unit or small residential places.  Long intro, yes - but basically two part question here.

1) Any advice as we look for property managers?  How do we find those that may be good at dealing with low income tenants and those with section 8 experience?

2) Anyone have any good recommendations for the upstate NY or Rochester specific area for good property managers?  The property is located in downtown Rochester, NY.  

[Nathan Gesner]

You can start by going to www.narpm.org and search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start.

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

I hope this basic guide helps. If you have specific questions about property management, I'll be happy to help!