Many real estate investors who choose to add rental properties to their portfolio for long term wealth building have a difficult time determining whether or not having a property management company is necessary and are concerned about how to find a good one.
First let’s discuss how to evaluate whether you need a property management company and then if your answer is “Yes”, keep reading because we’ll cover how to find yourself a good property management company.
Do I even need a property management company?
Well, in order to evaluate this, you have to ask yourself some key questions. The decision whether to be a “do-it-yourself landlord” (DIY landlord) or a mostly hands-off landlord is a personal one based on a number of factors.
Generally, you may choose to be a DIY landlord if you only have one or two properties, have time to respond to tenant needs, and have quick access to handymen to handle your repairs in timely fashion. Things such as lawn care and maintenance can be set up on monthly accounts so that you don’t have consistently call for service.
Regardless of your decision, be sure to add in the expense of a property manager (assume a flat rate of 10{7fcbeda410c9f02a886f83a59a5af911565ec7141a170d397df667872a958d9e} of rent amount) when determining your monthly expenses and setting your rental rates. At least then you can pay yourself for doing the job and already have this allocated expense in place if you ever change your mind and choose to bring a property manager onboard.
I’m not interested in DIY land lording. I need a property manager. How do I find a good one?
The absolute best way to find a solid property management company is by referrals. How can you get referrals? Several ways, but here’s a few ideas to get you started:
Once you receive your referrals, you will want to interview a few of the companies just to make sure you are comfortable with them and they can meet your specific needs.
Make sure you know what those needs are so that you can appropriate evaluate your options. Possible services you would look for are: collecting rent, repairs, maintenance (lawn care, snow removal), identifying and screening new tenants (including advertising and showing property to potential tenants), handling tenant disputes, and handling evictions.
Once you know what you’re looking for, be sure to find out which services they offer and the costs associated. Additional questions to ask include:
Experience:
Fees:
Operations:
Contracts:
This should give you a solid head start in evaluating whether you need a property management company and – if so – identifying an excellent one that you can hopefully have a long term relationship with for the management of your rental portfolio regardless of the size. Happy investing!
