Have had lots of people over the years ask me, in my opinion, what is the most important thing about investing in real estate? Everybody always assumes its price, location or timing the market correctly. After over 1300 real estate transactions primarily to investors worldwide, I can say without a doubt that property management is the single most important piece of the investing puzzle. In real estate, you can make a mistake on price, pick an iffy neighborhood, or hire a bad contractor and still be profitable. Hire the wrong property manager and you can lose your shirt overnight! Don’t get me wrong, location, price and rehab are huge factors in real estate investing and are very important. With the right property management company in place though you can make a mistake or experience a down turn in a market or neighborhood and still realize a good return on your investment through positive cash flow. A good property manager protects your investment in the long-term.Property Management near me
Obviously, the next question is “how do I find a good property manager”? Here are several tips on picking a good management company. This does not necessarily mean you; someone else will be managing your property.
Get a referral. Typically, when you invest, there are people in your peer group or circle of influence that are investing in the same market you are or know of someone who is also investing in that market. Ask them who they are using, who they used to use, and why they switched. Find out what they like about their management company but more importantly find out what they don’t like about them. The management company may do a great job of placing tenants but are lacking in the communication department; without communication, you’re sunk! Access to your management company is very important for the investor’s peace of mind. There is nothing worse than leaving a message or sending a couple of emails and all you hear are crickets in the background. At first, you assume they are busy and will get to you soon. After a while, though, investors start wondering why no one is responding and that’s when panic sets in. Did the tenant leave? Did the management company run off with my money? DID MY HOUSE BURN DOWN? Generally, none of the above is true but a good property manager will respond within 24 hours of your inquiry.
Ask the management company that you are considering doing business with for references. Ideally, I believe you want 5 to 10 references from previous clients as well as current clients that have been using the management company longer than 1 year. If they are not willing to provide you with any past clients, pass on them. When you get the references, CALL THEM. Ask them the same questions about what they like and don’t like.