#1 – Important reminder: 9 out of 10 property managers are no good!!
In other words, 90% of qualified property managers cannot operate your property to its highest levels. Face it, the property management business is a tough business to make money in. They usually over-commit and under-deliver. It takes years to be successful in it, let alone grow profitably. And no one cares more about your investment than you do.
#2 – Make sure the property management company is in agreement with your business plan and exit strategy for the property.
Did you invest in this property for monthly cash flow for you to live off of, or for your retirement years down the road, or as a tax-shelter? Whatever the case, make sure your property manager knows, understands, and is in agreement with you.
#3 – You won’t find out if the property management is good or not, until you hire them for 3 months at least. Ouch.
Working with a property management company is like a marriage, you’ll find out if they can really do the job only after you hire them and they’ve been on the job for a time. Choose your property manager wisely.
#4 – To hire the best ones around get a referral from someone who is happy with their own property manager’s performance.
This is absolutely the best way to hire a new property manager successfully. Find someone such as a fellow-investor who is pleased with how their property is being managed.
#5 – Make sure they agree to send you monthly performance reports – get a sample of theirs before you hire them.
Upfront, when interviewing, ask what their property performance reporting capabilities are for owners. Get a sample of what they currently send out, then tell them what you need on weekly and monthly basis for reporting on the property. If they are incapable, then you have limited ways of holding them accountable.
#6 – Hold the property manager accountable with well-organized monthly meetings and with the “weekly accountability report”.
Every month, like clock-work there needs to be a meeting between you and the property managers. If you let these meetings sly and go by the wayside, think of a child that you slack discipline with. What happens?
#7 – Visit the property routinely (with surprises too).
Upon taking ownership, you should visit the property at least once per month (more if it is being rehabbed) for the first 6 months. Afterwards, site visits once per quarter should do.
#8 – Conduct an annual customer service satisfaction survey of the tenants or often called a “resident satisfaction survey”.
You could easily do this yourself or hire a third party to conduct the survey. The survey should address the following: maintenance of apartments and grounds, maintenance of community facilities (pool, clubhouse, etc.), maintenance of utilities (heat, water, garbage), tenant relations, leasing services, and security. Keep it simple, easy to fill-out, with a self-addressed stamped envelope, with names optional.
#9 – Plan for rainy days because stuff happens = build reserves.
Nothing comes between business relationships more so than the subject of money. Money problems seem to never appear until it’s needed and there is none. Build up and maintain a reserve fund for emergencies.
#10 – Don’t be afraid to pull the plug on the property manager if poor performance lingers.
Here a few signs to watch indicating it may be time to pull the plug: high delinquency of rent collection, worsening occupancy trend, habitually late reporting, and accounting irregularities.