Developing trust and clearly defining roles are among the key tenets of creating a successful and positive property owner-property manager relationship. Here are tips to help you build that foundation for a partnership that will be mutually successful.
Take time to Find a Qualified Property Manager
By doing a fair amount of homework on the front end, you can save yourself significant time, hassles and worries later.
Start by asking for recommendations from property owners you trust. Check out review sites.
Interview multiple companies and be prepared with a good list of interview questions. Make sure the company not only gives you good answers, but is patient, listens, and treats you respectfully. If their customer service commitment doesn’t shine through in the interview, it is unlikely to improve once you sign a management agreement.
At the same time, beware companies that simply tell you what you want to hear. Companies may make big claims: they can lease your home in two days, command sky-high rent, and keep maintenance costs to a specified minimum. But overpriced rentals don’t rent quickly and no one can predict maintenance needs with certainty. A trustworthy company will discuss typical costs, rental rates and time frames and provide a realistic assessment based on your home and the market. You want a company that’s willing and able to provide expert advice on rental rates and other issues, even if it doesn’t align with your initial ideas.
Clearly Define Roles
Thorough vetting should help you find a property management company that will make good on its promises. But you still need to read and analyze the management agreement and other documents before you sign.
Clarifying roles is the foundation of a good partnership. Discuss and agree about the management company’s responsibilities. Typical roles include leasing, managing tenants and handling all communication with tenants, collecting and enforcing rents, handling maintenance and repairs, and accounting. Owners may work with managers to set a budget and long-term plan for the property and will approve major work and expenses for the property.
Before you sign an agreement, ask questions about the company’s processes and internal systems. Questions like the ones below will ensure you know what to expect and will help you decide if you’re comfortable with the arrangement.
How do they handle leasing?
Is there in-house maintenance to handle urgent issues?
Do they pay bills and keep detailed financial records to make completing taxes and claiming deductions easier?
Do they provide online access to maintenance requests, statements and other key documents so you can get an update anytime?
Does the agreement require that you keep a reserve account? Or does the company cover bills upfront -– a sign of financial security.
If you’re uneasy with the answers, keep looking. Any red flags and you’ll find it hard to trust. The relationship will likely be challenging.
Once You Commit, Trust the Process
Once you chose a good company and you are confident you understand the company’s systems and the terms and conditions of the agreement, trust the process. A good manager like the one you’ve selected will keep you informed with detailed monthly reports and communicate important issues that you should be made aware of.
It is reasonable to have questions, especially at first. But avoid the temptation to micromanage. Switching roles can create confusion among owners, managers, tenants and third-party professionals. And that can lead to costly problems and affect your bottom line.
Expect Some Risk
A knowledgeable rental manager can help you avoid financial risk by avoiding problems or catching them early. However, nothing is foolproof. There are risks in any investment that cannot be foreseen, and things will come up.
Communicate, Communicate, Communicate.
Agree to a realistic communication schedule with your manager. This could include monthly or quarterly in-person meetings, online discussions or connecting by phone. We all get busy, but don’t let this piece slip. Stay in touch and return email communications.
You can also ask if your property management company has an online system and can post property inspection photos to your account. Pictures can be worth a thousand words (and multiple calls) in providing reassurance that all is well.
Have a question about your rental property? Contact us today.