Maybe you have military orders to move and a house that you KNOW will gain equity so you aren’t ready to let go of it yet; perhaps you want to try your hand at owning multiple homes for investment purposes, to build additional income producing opportunities; maybe you just ended up with an extra house…hey, it happens, just not to me but it happens. Maybe you have multiple homes you would like some assistance with or worse, have a property manager that you know you just need to make a change from (as your contact may be ready to renew) but not sure how to make sure a selection is made for your profit- referring to both your time and income. However you came to this intersection, the goal now is that you make the RIGHT selection in determining who your property management team should be.
Are they licensed?
Is the team you are working with licensed to manage property in the state of South Carolina? It is a regulation in this state that if a property is being managed by a person, business or even in some cases the actual owner of said property, to be licensed. Licensing requires a real estate class that concludes with a passed assessment, then a background check, credit check and assuming all is well, a licensing exam. Someone with a brokers license (aka Real Estate/Realtor) license can also function as a property manager, however, that is another point I will address.
Are they insured?
If an incident happened that resulted in a tenant or potential tenant suing then an insured management team would be one more barrier before it may get to your assets. It also bids you well should a claim arise from a handyman or other service person filing claim. I would still get with your insurance representative to see if they recommend an ‘umbrella’ policy or other form of insurance (property: Landlord or Fire policy)
What is in place for you to get your money?
Generally speaking the management acts as a buffer between you and the tenants. Tenants don’t need to have access to you, you don’t want them to have direct access to you so that also means, in most cases, that monies paid go though the management team. They have strict regulations about where this money goes and how it is to be handled. They end turn would send you money, be it after expenses should any repairs been necessary, and usually between immediately up to 30 days. This is important because as a team gains more properties this will become potentially harder for them to manage.
How they tend to tenants directly affects your income potential.
The agency you have a contract with may directly affect how successful your income earning possibilities are. The more timely they respond to the tenants, how responsive they are to potential tenants (with still keeping your interests as priority) and so on can determine how long someone may live in a property, how long of a lease they may decide to commit too and could also lessen the turnover rates.
A few good questions to ask…if someone calls to view a home over the weekend who do they reach? An office voicemail, a pager, an office cell that is carried home to the person on-call or perhaps the same person who signed their lease?
Do they offer automatic transfers to quicken the time it takes to receive rents?
Is there a maintenance team in place that is already proven to be reasonable in their rates?
What should be on your contract with your property management team?
What is fair to ask of them and to expect? What is a fair rate to pay those overseeing your properties?
This can range depending on the type of properties you own…usually 10% and sometimes more plus often there will be an up front fee. If you have a lot of properties it’s possible that the upfront amount can be reduced per new home added.
How long of a contract? One thing to keep in mind is that you can be sued if you have a company fill your properties and then you terminate their contract but you can test run a company for 12-18 months, 2 years or more.
People’s tendency are to share the problems and not the perks so not hearing from an agency isn’t necessarily bad or seeing negative reviews on their various sites and nothing positive is something to be cautious about. Often there will be a mix of reviews but the ones to note are the ones from other owners.
If you want to manage your properties but would like help with the initial screening process so you don’t have to deal with the 5 dozen phone calls and home showings and application checks…that is okay too! There are a range of options and you can select what is a good fit for your time and preferences. Just make sure that you are keeping up on the laws and regulations so you are in compliance.
I had the pleasure of enjoying some friend’s company over the weekend and we were speaking about the ins-and-outs of managing property. These people have been life long and quality renters so have had a range of experiences. One thing for sure, they would NEVER rent from ‘name I won’t mention’ big box agency. This agency has a large, very large, sales business and their overall objective is to sell homes. There are times when a home isn’t selling quick enough or whatever the need may be so the individuals involved decide to turn it into a rental. The goal of some of these companies is to eventually re-capture the seller so they offer this service. While it’s vital for a management team to have the owner’s priority it’s important to note that reasonable expectations on the tenant’s part need to be tended too along with services/amenities that their rent is paying for…as it is more than simply the structure they are residing in. Property managers that have invested time in both their owners and tenants can tell when things may be getting out of whack from tenant requests or a property needs to be tended to to prevent a larger bill down the road. It’s vital to have things in place, from the management team, to be able to keep your property so you can plan as well.
I hope this helps and you can leave a comment or email us for more information. Of course, we would welcome the opportunity to see what your goals as an owner are and how we can potential meet those goals. There are no fees to sit down and talk as we too need to make sure it’s a fit for us. If we cannot meet your expectations we will be happy to share who may be able too.