Great starting points when making a property management hire.
Being in property management for many years in the Phoenix market, I recently had to hire a property management company in another market for a rental property I had acquired. Based on my experience managing hundreds of properties over the years, here are the top 5 things I think every investor should consider when making a hire:
- Who is actually managing my property? This is huge, and far too many investors overlook this simple question when interviewing and hiring a property management company. Here is the reality, there are a lot of property management business owners in the Phoenix market that are very talented, knowledgeable, and know what they are doing. Here is the problem though, most of them aren’t actually managing your property. While you love what they had to say, they are handing your property off to a hired manager that might not be a great fit for you. The individual managing your property (not the company), will have the biggest impact on the success or failure of your property. So make sure you ask who will actually be managing, and schedule an interview with that individual to make sure they are qualified and the right fit for you.
- Location of the property management company. This is a simple thing to look at that I feel plays a pretty big roll in hiring the right company. The closer the company is to your property, the better job they will be able to do. They can get to a showing in 5 minutes if needed. On the other hand if you have a home in Mesa and your property manager is located in Glendale and they get an opportunity to show your property at 5:00 on a Friday, guess what? That showing is not happening! Being closer also allows the manager to have more frequent drive-bys and in my opinion, have a better pulse on the market where they spend most of their time.
- Longevity of the property management company. There is a cliche that states, ‘there is no substitute for experience.’ This could not ring more true in the property management industry. This is a problem solving business, and while I have been managing property for 14 years, I still frequently have situations come up that are unique and new. Having experience in how to navigate issues while following the Landlord Tenant Act is crucial. One of the most underrated benefits of hiring a professional property management company is their knowledge of the local laws when it comes to tenants and protecting your liability. All it takes is one bad property manager and the landlord ends up getting sued for their mistake.
- Reviews. Let it be known that I hate reviews. Most people won’t go out of their way to give a review on a positive experience. The ones who will take time out of their day to post a review is someone who is upset or has been wronged! So why are reviews important when choosing a property management company? Simple, I don’t mind if I see bad reviews from tenants. This usually means the management company is doing their job. I don’t even care about positive client reviews, those could be solicited for all I know. What I’m looking for are client complaints. If a company has clients destroying them online, that’s a good indicator they aren’t the right company for you.
- Do they have an in-house maintenance company? This is really simple. Owning a maintenance company or having an in-house maintenance company is a CONFLICT OF INTEREST. This tells me where their priorities are. I’ve heard all the BS excuses like “we can control the scheduling to get repairs done sooner” and “we get our clients a better deal” and so on. There is one glaring reason property management companies open their own maintenance company, TO MAKE MORE MONEY. Sorry guys, I need my property manager to be 100% on my side when hiring work done. I need them to make sure I’m getting a fair price. I want them to have options when work needs to be done. This motivates a vendor to do good work at a good price because of the repeat business property management companies can provide. They know there is a line of good vendors ready to take their spot if they mess up. So why would I want the property management companies’ maintenance company to monopolize the work on my property?