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You’ve crunched numbers. You’ve considered all the possible outcomes and challenges. And now you’re comfortable moving forward hiring a property management company to manage your rental property. Congratulations. While you’ve made some substantial progress, your journey to rent your property still has some road left to travel.
Entrusting your investment property to a property management company is easy, though admittedly emotional. But deciding which property management company to hire is the real important decision. These should be the most important factors you consider when comparing property management companies:
One of the more important issues you’re interested in is the cost. There are fees for management, vacancy, set-up, maintenance, eviction, advertising, unpaid invoices and more. Renting a property is meant to bring you additional income, right? The less a property management company charges, the better. But while price is obviously a major factor, don’t get too caught up in only the total cost of these fees. Consider how that cost is spread out over time. Some property management companies load up a management contract with upfront costs. Ask yourself, if they are paid up front, what’s their incentive to perform at a high level throughout the duration the agreement? Other property management companies forgo those heavy upfront costs in favor of building long-term relationships with you and proving themselves over time.
You’ve heard the saying “Bigger isn’t always better.” That applies when considering property management companies. If your research shows that all factors are equal between two property management companies other than sheer size, you may receive more personalized attention from that small partner. You’ll be viewed less as a number and more as a true partner. In the end, we all want a property management company we can trust that provides timely and courteous communication throughout the relationship.
The property management company is responsible for maintaining and hopefully increasing the value of your investment property during their time as your partner. That can be done by properly addressing existing issues and being proactive with preventative maintenance. Here are a few questions to ask property management companies about their maintenance approach:
How are tenant maintenance requests tracked and acted upon?
What’s the process for after hours maintenance?
What can you tell me about your maintenance technicians?
Is maintenance coverage 24/7 and 365 days a year?
What’s the process for entering my property?
You already know how important a property management company is. The tenant chosen to live in your property is also important. The services of the property management partner should include finding, screening and securing tenants. You’ll want to know where your rental listing will be advertised, how screenings will be conducted on applicants and what steps will be taken to secure tenants. It’s important to feel comfortable with the property management company’s approach to tenants and their capability to find a great fit.