By: David Chernin of Zedek Group
What do you need to understand about property managers and their role?
#1—How vital they are in the success of your investment
#2—Potential consequences of a weak property manager
#3—What to look for in a property manager
The property manager is in control of your property on a day-to-day basis. He makes sure repairs are taken care of and the property stays in working order, places the tenants and keeps an eye on them while they are there, and most importantly he stays in communication with the owner about the property. If your manager doesn’t know what he is doing, or isn’t overly concerned with how he is doing it, here are some negatives that can result:
Higher Vacancy Rates—the property manager assesses the best tenants; a poor tenant candidate can result in bounced checks, high turnover, property damage and evictions.
Higher Repair Costs—the owner depends on the property manager to be his eyes and ears on his investment. With an inattentive manager, small problems become bigger more costly ones. An inexperienced manager, or one managing a small number of properties, will usually not have a keen sense of how to approach many issues or know the right person to call for the job, often resulting in extra work. He will also have to pay “full retail” and pass the costs plus his time to the owner. Finally, it is sad to say, but many managers bill the owner for “repairs” that were not needed at all.
Confusing, Irregular Financial Data—the inability to rely on a property manager to provide regular accounting that the owner can understand results in stress at tax time and an unclear understanding of what is happening with his property. This is critical for owners of multiple properties, an area in which we excel.
What Makes a Good Property Manager (yes—they do exist!)
Feeling of Trust—a good manager will have a system to stay in touch with the owner. When issues arise, the owner will be consulted, and if he cannot be reached, the manager will not only handle the property smartly, but care about the owner’s expenses.
Good and Quick Communication: A good manager, or someone on his team, will return calls and emails the same day or at least within 24 hours.
Proper Maintenance that Doesn’t Break the Bank—Any owner can call a contractor from 3,000 miles away. Why pay someone to do that for him? A professional manager with a large portfolio of properties will have developed a reliable team of service people who want to provide timely and top notch service to one of his best customers. A good manager’s experience will help him match the right person for the job, lessening the likelihood of a redo.
Advantage of Monthly Fee and the Hourly Fee—The monthly fee the owner pays should ensure ongoing oversight (site visits, maintenance reports, scheduling service, being “on call”). An hourly fee is usual for time the management staff spends on services that are out of the ordinary. A really good manager is one who, if a tenant calls and says the toilet is not working, will go adjust the floaty ball himself and not charge an hourly fee for such a minor issue.
Knows the Importance of Tenant Quality—Any period of vacancy is stressful for an owner, but being patient in finding the right renter is key. Good managers may not place renters as quickly, but when they do, the renter is well qualified and shows all the signs of holding up their end of the lease. In the long run, good renters will cost much less than trying to fill the property with just anyone.
Flexibility—Some firms offer an “off the shelf” package of essentials to their clients. This often works for the owner who is more hands-on and may have local contacts to take care of repairs and improvements. For owners far away or those that do not want to take on the day-to-day, flexibility is key. Every owner is different and has various goals and priorities. The professional manager will understand this and offer services that suit those requirements.
Look out for our next article in Bizness Magazine: Questions to ask when hiring a property manager.
Trusted Property Management
A division of the Zedek Group