For any rental property, a good property manager with an excellent working knowledge of real estate is essential to ensure stability of rental income, and to strategically minimize vacancies.
Yet, with so many entities competing in this space, how do you find a good property manager with a solid track record and who can deliver the right services to achieve the optimum net income performance? Some realtors know how to sell a house but may not offer services to manage property.
Reading reviews and an online search will get you started
Looking through UpNest customer reviews and doing some further research online is the best way to start. You can screen property managers you're already familiar with, as well as look for new companies. You can also take a look at a couple of dedicated real estate websites which provide lists of property management companies in your area. Then look through the websites or Facebook pages of these companies for reviews, comments—and also for any complaints from customers. Most of the better-known sites have customer review pages for ease of comparison.
Another way is to seek personal references or referral from people you know who also employ property managers. These may include other property owners, realtors, your real estate investor network, and general or specialized contractors. It's important to get referrals from several different people to ensure you get the full picture.
Meet with several prospective property managers
Invite two or three short-listed property managers to meet with you. Ask them to make a presentation, covering topics such as:
- their track record and number of other properties currently under management, staff employed; capacity and capability to manage your property;
- scope of services provided, including rental and arrears collection and receipt, maintenance programs, planned repairs etc;
- knowledge of relevant legislation relating tenancies and leases;
- key contract terms including details of fees for management, contract duration, termination;
professional qualifications, ie does the individual or company have a current real estate broker’s or a property management license? Also ask about their accreditations and affiliations: for example, do they belong to any or all of the following organizations:
- The Institute of Real Estate Management (IREM)
- The National Apartment Association (NAA)
- The National Association of Residential Property Managers (NARPM)
- Undertake inspection of properties managed by those entities you short-list
There’s nothing better than seeing your potential property manager in action as it were. So, go and take a look at several properties managed by the entity you are considering. Are they well maintained and in good order or are there any obvious necessary repairs? Are the surrounding areas clean and tidy or blighted by debris or trash?
If you see any tenants during your inspections, you can also get their opinions about the property manager.
Carefully review the proposed property Management Agreement terms
Apart from the key commercial terms (usually relating to fees and contract duration), as the management agreement is a binding contract between you and the property manager, also ensure that all terms therein are clear and unambiguous. It might be worth having a lawyer look over the contract to make sure you're protected and held harmless in case of certain events occurring, or in the event of injuries or problems with tenants. In this latter regard, adequate insurance in essential—at a minimum for general liability and property-casualty.
Spending some time to find and engage a good property manager is well worth it in the long run. After all you are entrusting your real estate investment to a third party—and you want them to manage it and maximize your returns…, just as you would!
