How to hire a property manager
Posted: January 26th, 2015
Should I hire a property manager? by Glenn Gurvitch
If you’re going to get into buying and holding rental properties, you will eventually have to decide how you are going to manage them.
First you need to ask yourself what your five and ten year goal is with the property? You’ve read the studies about holding properties for the long term but you also want to start making money right now and feel the gains of success since you just put down a huge chunk of change on your investment. If this sounds like your recent history and thinking then stop and ask yourself what you want out of your investment and how you want to expand your business to acquire more properties.
The studies suggest that you can become a more successful property owner with the ability to purchase more properties by hiring a property manager to take care of the day-to-day operations. Saving 8-10% per month and doing the management yourself might not be the best route to wealth building. The average rental property in the state of Florida rents in the $1200-$1300 per month range. The typical property management fee would be about one hundred dollars for this type of property.
Hiring a property manager for your home.
Is your time handling daily calls from the tenant, preparing leases, posting eviction notices, meeting with subcontractors, mitigating security deposit disputes and security deposit handling procedures, conducting move-out inspections, applying for rental licenses, attending HOA meetings about your property violations, paying subcontractors, preparing monthly and year end statements? Is this all worth saving $100 per month? And do you actually have the knowledge to handle these tasks with competence and within compliance with state laws.
There are plenty of property managers to call and interview. The best property managers have modern websites, streamlined processes and no hidden fees. Be careful and review the management agreement as some of the companies that appear to be the lowest cost have hidden fees in the agreement that will affect you down the road. Things like mark-up on maintenance, lease preparation fees, inspection fees, and other fee you need to watch out for.
Before you hire a property manager you should consider the following.
An excellent property manager will:
Explain the tenant placement procedures to you and really understand how important the tenant screening process is.
- Mitigate non-payment issues in a way that decreases the likelihood of an eviction.
- Answers the phone or calls you back within 15 minutes.
- Prepares monthly statements and year end statements
- Views your property like their own, looking out for you and finding ways to save money on repairs and turnover while maximizing your return on investment.
- Knows how to price the property in the range that will attract the most amount of qualified tenants in the shortest amount of time. He/she will know how to price it without renting the property below market rate or pricing it so high it sits for too long before you reduce the rent rate.