Investing and Property Management

Investing and Property Management

I did had lots of people over the years ask me, in my opinion, what is the biggest thing about investing in real estate? Everybody always assumes a price, location or timing the market correctly. After in excess of 1300 real estate transactions primarily to investors worldwide, I can also say without a doubt that property management is the single most important section of the investing puzzle. In real estate, you can make a mistake for price, pick an iffy neighborhood, or hire an awful contractor and still be profitable. Hire the wrong property manager and you’ll lose your shirt overnight! Don’t get me wrong, site, price and rehab are huge factors in bulk reo and are very important. With the right property management company in place however, 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 favorable cash flow. A good property manager protects your investment in the continuous.

Obviously, the next question is “how do I find a good building manager”? Here are several tips on picking a good management supplier. This does not necessarily mean you; someone else will be managing your property.

Find a referral. Typically, when you invest, there are people in your expert group or circle of influence that are investing in the exact same market you are or know of someone who is also investing in of which market. Ask them who they are using, who they used to apply, and why they switched. Find out what they like about their particular management company but more importantly find out what they don’t like about these folks. The management company may do a great job of positioning tenants but are lacking in the communication department; without connecting, you’re sunk! Access to your management company is very important with the investor’s peace of mind. There is nothing worse than leaving a message or simply sending a couple of emails and all you hear are crickets without your knowledge. At first, you assume they are busy and will get to people soon. After a while, though, investors start wondering why no one can be responding and that’s when panic sets in. Did the renter leave? Did the management company run off with my favorite money? DID MY HOUSE BURN DOWN? Generally, non-e of your above is true but a good property manager will respond in just 24 hours of your inquiry.

Ask the management company you happen to be considering doing business with for references. Ideally, I believe you want 6 to 12 references from previous clients as well as current clients that are using the management company longer than 1 year. If they are never willing to provide you with any past clients, pass on them. While you get the references, CALL THEM. Ask them the same questions in what they like and don’t like.

Get a list of policies plus procedures from the management company. You need to know how they handle promotion of the properties for tenants, late payments, evictions, preservation calls, inspections, accounting, owner disbursements, etc . A good control company will have this information readily available.

Find out if the management company is licensed in the state you are investing in. Most states necessitate that the property manager is a licensed real estate broker and are performed accountable to their state real estate board. There are many “property managers” out there that are not, but have taken this opportunity to increase their very own income while investing is hot. Though they may be more cost-effective, DO NOT USE AN UNLICENSED MANAGEMENT COMPANY! You will have no alternative to police them.

Find out what software program the management organization uses. There are a few good property management software programs that are online such as Buildium and PropertyWare that give the property owner your portal login so you can access your account via cyberspace 24 hours a day. A good property management company will log most of tenant calls, maintenance concerns, payments, late notices and so forth, into the software program. This is beneficial to both parties as a majority of a strong investor’s questions or concerns can be addressed by logging into the computer software and looking at the info at hand there. This eliminates loads of phone calls between the property manager and the owner. It also helps the actual to narrow down questions or concerns by addressing specific information obtained in their portal.