You may have heard, but in case you haven’t, when it comes to your real estate investment portfolio, your property manager is the most integral part of your team. Why is this?
Your PM directly manages your or your team’s real estate assets. They work directly with the residents of your property, have a real-time pulse of operations and know the condition of your rentals. Any sort of mismanagement can result in lost income and equity. Property managers can either grow value or destroy it. This is why it is critical to choose a competent PM. To make this easy, let’s discuss three red flags to easily weed out PM’s that may not cut it:
- Lowest-price providers
The statement “You get what you pay for” could never be so applicable. Would you go with the lowest-price surgeon for an important operation on a family member? Would you pay for the lowest-priced home security option to ensure safety in your home? The same applies for property management. It is often the case that the lowest cost PM will lead to dissatisfaction. They may not be thoroughly incentivized to improve operations, fill vacancies, cut expenses, raise rents, and so on. Not to mention, there are often added fees such as lease fees that higher cost PM’s include. Ensure you are comparing apples to apples and do not get suckered into the low-price focus.
- Lack of experience in your market
When you find a PM, make sure that you know what their experience is in your market. Maybe they have offices in many cities across the nation, but if you find that they are new to your market or manage very few properties, their is a chance that their lack of experience can be detrimental to your operational goals. They may not understand the market rents and raise accordingly. Their lack of market intelligence could make their marketing efforts ineffective, prolonging the time that units are vacant. Their lack of competitiveness in the marketplace may cause you to lose valuable potential residents to your competition.
- Their existing managed rentals are in poor shape
Certainly do your due diligence to find out what properties that your prospective PM manages in the area. As you dig deeper, go to their website and visit the site to understand the condition of the rentals. When you go through this process, if it is clear that the properties or units are under managed, this should be a clear red flag that this is not the PM for you.
In your search for a great property manager, maintain high standards for quality and settle for no less. To help with beginning your search, I recommend you visit National Association of Residential Property Managers and search for certified managers in your area.
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Rodney Robinson II