Let's talk about a topic that most real estate investors really hate to talk about, think about and sure don't want spend too much time reading about. Rental property management!
This topic is about as polarizing as politics for real estate investors because so many have specific thoughts and beliefs. And to be sure, property management is a tough business. Unfortunately, there is a ton of mis-information, innuendo and just plain false stories about the property management business.
For investors who have taken on landlord responsibilities, you know just how demanding it can be. But most real estate investors never deal with the nitty gritty details of property management, even if they understand what goes into it.
Unfortunately, that theoretical understanding of the gargantuan task of property management means that too many investors are willing to overlook quality to save on costs.
We understand—really. After all, you’re in this business to make money, and if you’re spending a ton on property management, it means fewer dollars in your retirement accounts when rent is due. Right?
Not so fast.
Premium property management is worth it. Really.
Here’s the thing about property management: you get what you pay for. I want to be real clear before going forward. Premier Property Management Group was built for one specific purpose and then grew into what it is today. It was built because the property management choices in Memphis were so bad, we felt we had no choice but to build our own management company if we wanted our clients to have a top-notch experience.
The difference between good property management and bad property management isn’t always immediately noticeable to real estate investors. Why? Because good property management isn’t something you have to notice, and bad property management does everything to hide just how bad it is. It took our family to have some bad experiences ourselves to conclude that the only way we were going to find the level of service for our clients that we expected was to build from the ground up. In doing so, we built a helluva a management company that focuses solely on our clients and absolutely sets our rates based on providing great service and charging appropriately for it.
That is where many real estate investors make their first mistakes.
Making comparisons on property management companies based solely on price will come back to haunt real estate investors when they end up with chronically late rent payments, a property that’s falling apart, broken lease agreements, and high tenant turnover. Bad property management can hurt not only your long-term investment success, but it can damage one of your most valuable assets: your reputation.
Your management team is the on-the-ground, public face of your investment business. That’s big.
So really, what does a good property management team look like? What benefits do you get for investing in premium service?
What Ideal Property Management Looks Like
1. You’re in the know.
Solid property management teams make sure they communication. While they don’t overload investors with updates, they don’t hesitate to offer reports, documentation, and updates. Good property managers are organized and never try to hide things from you: they’re proud of the work they’re doing and have a genuine interest in providing quality services.
2. You never have to ask where rent is.
Good property managers know how to track down rent payments. They don’t allow themselves to bend in the rules—they make expectations for payment clear and have the organization and prowess to ensure you get paid on time.
3. Your tenants feel taken care of.
Good property managers aren’t just there to collect rent. They build a rapport with your tenants, ensuring that they feel welcome and valued. They listen carefully to complaints and maintenance requests and take appropriate action. Tenants won’t resent a good manager, because they’re doing everything they can to ensure the tenant is taken care of. Good managers know how to diffuse uncomfortable situations and resolve conflict: not escalate it.
4. You rarely encounter a bad tenant.
How well does your manager screen tenants? You should know! Experienced property managers know that it’s worth the extra time and effort to really vet tenants. Because they screen well, you’re so much less likely to have to fool with the headache of property damages, broken lease agreements, criminal activity, and chronically late rent. So many problems are solved just when the tenants you have are good ones.
5. Maintenance issues never catch you by surprise.
Finding out you have to drop a couple of thousand dollars on a problem that could’ve been resolved for a fraction of the cost a few months ago just isn’t fun, to put it lightly. Ace property managers are on top of everything. They not only pay attention to maintenance requests, but are vigilant in detecting issues early.
6. Legal issues are few & far between.
You know who ends up in a lot of lawsuits? Bad property managers. Now, we know not all managers are sued for valid reasons. But we’ve also heard one too many stories and illegal evictions, bed bug horrors, and generally awful management. Good managers don’t get into those kind of situations. They don’t just avoid them, they actively prevent them and are well-versed in the law.
7. You can really be a passive investor.
The biggest advantage you have in hiring good property managers? You get to really be a passive real estate investor. They give you the security of knowing your property is in capable hands that will keep things running smoothly, leaving you room to focus on what you want to.