What you can and can´t expect from a property manager
A property manager generally has two roles to play: keeping the property owner happy and keeping the tenant happy. It´s not an easy job and is very labor intensive.
Michael Zuber wrote a great blog last week regarding why a person capable of managing their own properties should consider using a property company. I generally don´t have that problem as most of the people I help purchase real estate live outside of the country.
However I do need to manage expectations quite a bit regarding what a property manager can and can´t do for them. Some people treat property managers like personal assistants or employees (they aren´t) while others are too polite to disturb them at all!
A professional who manages your portfolio and your tenants well over a number of years is worth his/her weight in gold.
The better your management company is at doing his/her job, the happier the tenant will be and longer he/she will stay. Having tenants move in and out on a regular basis is a stressful and expensive experience that should be avoided at almost all costs.
The exceptions would be if they damage your property, refuse to pay rent on time or insist on paying a rent that no longer reflects the market rate. That aside, you should bend over backwards to keep tenants happy.
All management companies charge additional fees for placing a new tenant or renewing the lease of an existing tenant, so you should make yourself aware of these and input them into your calculations.
Amongst other things, your management company is responsible for:
- Liaising with your tenant
- Ensuring they pay on time
- Organizing any repairs necessary
- Communicating with you on a regular basis
- Paying you the balance of your rent
- Providing monthly statements
- Placing new tenants.
These guys are your eyes and ears on the ground so it is very important that you develop a good working relationship with them. They work for you so please do not be afraid to ask questions and seek advice, but be polite and respectful.
Your property manager will also have a good understanding of what it is to own a home in the locality too, so if you are unsure of anything from property taxes to Home Owners Associations and how they work; they will generally be able to help so again - don’t be afraid to ask!
Happy investing.
Comments (6)
Sorry to hear that Dale - I like the "mismanagement" moniker! My own experience has been broadly positive, although I´ve had my fair share of ups and downs over the years.
Colin G Murphy, almost 12 years ago
I have yet to find a good PM company. Most of the time I have to refer to them as the mismanagement companies as they really do not do a good job for the properties or owners they are supposed to be working for.
Dale Osborn, almost 12 years ago
In the last few years I have purchased 20 properties and manage all of them in addition to doing another unrelated full time job. I hear all kind of complaints from prospective tenants about property manages not showing up when they said they would and not getting back to the potential tenants in a timely manner. I know that all property managers are not all that bad but there are plenty out there that don’t do a good job. When I’m advertising for a property I make sure to check my email very frequently and try and answer my phone every time it rings. So if you do look for a property manager make sure to screen them well!
Paul Salmela, almost 12 years ago
Hi Paul - I´m very impressed! Certainly an organised person can hold down a full time job and manage a couple of dozen properties if they are willing to put in the effort. You must live very close to your portfolio though? For sure you need to screen your property manager well - a lot of them are very lazy.
Colin G Murphy, almost 12 years ago
I know a property manager who hears from owners that the HOA only reaches them when a notice is late or a bill is late, now again, tripling fines. The property manager doesn't help. They said they would. That's how they got to be property manager. They don't help. It goes on.
Joseph Donnantuoni, almost 12 years ago
Hi Joseph - do you mean HOA dues are going unpaid because the owner hasn´t been notified by the property manager that they are due? Some property managers deduct HOA dues directly from gross rent, but many don´t (and they have no obligation to do so.) It´s very important to agree in advance how these overheads will be managed to avoid unnecessary fines. Either way, this manager doesn´t sound particularly helpful. Has he been in business for long?
Colin G Murphy, almost 12 years ago