When you are a busy property owner and you get overwhelmed with management tasks, it may be time to look for a property management company that will do these tasks for you.
Today, residential properties account for the largest segment in the property management market, resulting in an increase in the number of rental property owners.[1]
This influx of demand for property management creates the need for property management firms to offer competitive services, prices, and unique marketing strategies.
But how would you know which property management firm is suitable for your needs? It may be overwhelming to find one on your own so in this article, we’ll guide you on how to choose a property management company that will be most beneficial for you.
Is it important to have a reliable property management company?
Being a property owner helps you generate passive income but only if your investment properties are overseen correctly. It is vital to have a property management company that has the know-how and accountability when it comes to marketing, tenant selecting, rent-collecting, and maintaining investment properties.
These responsibilities demand for attention, time, and specialized skills that can be a burden if you prefer not to have property management companies take care of your rental property. Worse, if you have selected a property management firm but turned out to be inefficient and irresponsible.
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Factors to consider when looking for property management companies
– Variety of property managers
The number of senior and new property managers in the company’s team can give you an idea of who already has a pool of experience, and which ones are still learning on the job.
Remember that the second one is a red flag when handling crucial, specialized tasks. It is vital that companies only employ property managers who will not put the company’s reputation and the properties they manage at stake. [2]
– Longevity in the business
A company’s name and its corresponding reviews show a business’ proven track record. It may be because of the property management firm’s charismatic way of handling clients, a wide range of professional services, award-winning performance, or all of the above.
Evaluating details that contribute to their longevity in the property management industry helps in gauging what makes them the property management company of choice.
– Property management solutions offered
Another factor to consider is the scope of the services they offer. What is included in their rental property services? Are rent collection, repairs, cash flow reports, screening, and eviction of tenants included?
These questions will help you identify their area of expertise and specialization, and their company’s knowledge on most states’ regulations and housing laws.
– Cost of services
Would you be able to negotiate their monthly management fee to be charged annually at a discount? Can you work out packages and deals that are cost-saving if you avail more services from them?
Choose a property management company that makes every penny you pay worth it. If not, you will only be breaking the bank for something you have not fully utilized.
– Properties being managed
Aside from the points above, it also matters what types of rental properties they manage. You must also recognize how many properties of which type does the company look out for.
Whether they are family homes or commercial properties, the volume of properties will also determine if they can still take on additional work, or if they have too little experience managing the property you have.
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6 Easy Steps to Select the Right Property Management Company for You
1. Determine what you need
You will not know what you are looking for if you don’t understand what you need. This saying applies to life in general, and in choosing a property management company as well.
Once you’ve listed the services you need, you can categorize them as non-negotiable and nice-to-haves. Then you can start finding a firm offering specialized knowledge on the scope and the specific services you require. If they do, you can take a run-through at the nice-to-haves, and if it also falls within the budget.
2. Do research, research, and more research
When it comes to research, it does not only pertain to online review sites and ratings but also referrals and personal experiences from current clients, if it is possible to obtain them.
It would be a plus if references are provided in their portfolio, or if they are constantly being referred by family and friends who already availed of their services and have experienced working with them first-hand.
Keep in mind that you can choose from any property management company – from the one that pops out of your online search engine to the most talked about by your colleagues.
Just make sure to think like a tenant during your research because by putting yourself in their shoes, you may consider the same things they do when looking for a rental property. [3]
Experience the unparalleled expertise of Lotus West Properties, a trusted leader in property management serving Hollywood, Malibu, Marina Del Rey, and the Greater Los Angeles area.
3. Interview potential companies
After you have done your research, you can start taking notes of what you want to ask potential PM companies.
Talking to a property manager under their arm helps gauge the property management company’s specialty and credentials and inquire about other information not conveyed in writing.
Do they do personal property inspections? How often do they give updates to owners? Do they comply with the laws and regulations that govern rental properties’ locations? How do they screen prospective tenants? How do they handle maintenance requests and how long before they respond to them?
When doing interviews, prefer to meet in person for you to evaluate their non-verbal gestures and get a better feel about working with them.
4. Check on the relevance and validity of licenses and insurance
As soon as you have interviewed your potential service provider, you can ask for proper licensing documents and affiliated organizations. Check-in with the property manager you interviewed if they are individually licensed too.
It is also worth verifying if their business is updated with their licenses, training, and under sufficient insurance coverage to prove that the company is legitimate.
This will ensure that your property is secured under a company that is up-to-date with the highest level of policies, certifications, and processes that follow federal and state legal compliance.
5. Review the scope of contracts and fees
Aside from securing their licenses and insurance coverages, you can also examine the property management agreement carefully. Showing documents proving state requirement completion does not necessarily mean they are acting in accordance with them.
It is still better to look at what the contract stipulates and ask for item clarifications if you have any. This may include their rent collection process, how do they come up with the fees and contract inclusions like handling maintenance concerns.
Look out for hidden management fees, and discuss how they deal with any tenant disagreements, or if you can add or remove provisions you may not approve in the contract.
6. Consider the professional standards of the company
Do they update you with any changes? Do they answer tenant needs directly? Do they involve you in applicant screening? Excellent access to communication, convenience, and customer service are also plus points when choosing a property management firm.
It’s not just about what is in their property management procedures but also ‘how’ they continuously upkeep these properties, accommodate and respond quickly to queries, and make property owners and tenants prioritized.
Try giving them situations on how they would handle crisis like payment refusal, eviction notices, and breaches of contract. This can help you determine their leadership style, analytical thinking, expertise, and how they work under pressure on property management issues.
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Key Takeaway: Making the Right Choice
Remember that you are getting their services so that managing a property will be easier for you, so anything less of meeting your purpose of having one is an automatic red flag.
It is important to consider the services, reviews, contract and fee inclusions, and working principles of the property management firm. By researching well and interviewing them, you remain in control of your property and comfortably leave the stressful parts of the job with the experts.
Having the right property management company also means having peace of mind knowing your and your tenants’ needs are covered.
Find your perfect professional property partner at Lotus Properties. With over a decade of experience, you can be assured that concerns on your property and tenant relationships are addressed efficiently. Contact us today to talk to our expert property managers.
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