Finance and Ethics in Property Management
Part II in Selecting the Right Property Management Company
In Part 1, we discussed ways to avoid problems with maintenance, communication, and customer service. Today we offer additional guidance to landlords on financial administration and ethics issues that can come up and how to select a professional, skilled company to avoid potential problems.
Financial Administration in Property Management
Owners should never be in the dark regarding the finances of their rental property. Companies should have clear policies and systems for updating financial information promptly and keeping you informed. Disorganization or secrecy are big red flags.
Top property management companies have advanced software to keep records and make them available to owners through secure online portals. Transactions, monthly statements, and other information posts automatically, and owners can view them anytime. Make sure all companies will provide you with electronic or paper copies of all receipts.
In addition, ask any company you’re considering about their policies for tenant late payment fees, charges for tenant damage to the property, and budgets for standard repairs by contractors. Confirm that they also provide this information to tenants prior to occupancy. Clear and upfront communication about all fees is essential to prevent any issues.
Lastly, you should also set a maximum amount the company can spend on your property without authorization. Having the company consult you before completing larger repairs will prevent unpleasant surprises and give you a chance to participate in the decision.
Ethics in Property Management
You want a company you can trust with your valuable investment. And that requires managers who not only follow the law but also behave professionally and follow a strict code of ethics. Determining which companies do takes some checking.
Professional organizations, such as the National Association of Residential Property Managers or the Property Management Association, hold members to high ethical standards and offer additional training and professional development, so checking to see if managers are members may be a place to start.
Look into how the company behaves toward both owners and tenants. Although a property management company could treat you well as a client, this does not necessarily mean the company treats tenants with the same respect and level of professional behavior. Again, both landlord and tenant references will shed light on how the company operates.
Once you decide to do business with a company, be sure it records transactions in a timely and accurate manner. Contractor estimates for any maintenance issues should be consistent with industry standards.
Considering all these factors when searching for a property manager will help you find a qualified partner with whom you can develop a productive relationship. And a good relationship with a top professional puts you in the best position to maintain your property in excellent condition, attract top-quality tenants and continue to have a profitable investment.