Income properties are an investment in your future, and you want to do everything in your power to ensure that investment yields a good return. One aspect of this that often gets overlooked is the importance of finding a property manager for real estate investment purposes, because a manager can mean the difference between a successful investment and a flop.
Depending on your needs, a property manager can be responsible for anything from keeping tenants happy to addressing maintenance to ensuring sustainable revenue while also keeping costs down, and much more. As such, finding the right property manager is a decision that requires great weight.
Here are a few important considerations to keep in mind when hiring a property manager.
Experience and portfolio
Being a great property manager demands experience, and typically, the more years a person has been doing the job, the better he or she will be. Even after 20 years on the job, you can still encounter a scenario you're unfamiliar with, but having experience dealing with people, assessing risk, and making decisions will make you better equipped to handle anything.
Some questions to ask include how long the prospective manager has been working, how many properties he or she is currently managing, if the experience is as a residential or commercial property manager, and whether he or she owns any rental properties. This last one is important because it means the person will know what it takes to be a good property manager while also understanding and respecting your position as an investor.
Property managers offer a wide range of services, but not all managers will provide the same ones. When choosing a manager for your property, it’s important to find one whose services are in line with your needs and goals. For instance, the responsibilities of a commercial, residential, or retail property manager will all be very different, and the manager you hire must offer services that meet the needs of your property. Here are some things to consider:
- Will the manager put effort into finding good and long-term tenants?
- Can the property manager handle the maintenance requirements of the building?
- Does the manager offer regular inspections?
- Is there a plan in place to collect rent and deal with late payments?
Each property manager will have a different fee schedule and charge a different rate based on the services offered and other factors. A typical monthly management fee is between 5 to 10 percent of the rent they collect, but there are other things to consider as well. For instance, are all services included in the fee, or are there some services that require additional fees?
Similarly, if the manager collects additional fees from tenants, such as late fees, how does that money get divided between you and the manager? To get an idea of the true cost of hiring a particular property manager, you have to look at all these angles, and not just the base rate.
The right property manager will handle daily operations, take responsibility for maintenance, and otherwise take care of your investment on your behalf, so it’s integral to know what to look for in a good property manager. If you're looking at a new real estate investment to add to your portfolio, contact us today to get the application started for your commercial financing.