Buying an investment property is a fun journey that shouldn’t be full of headaches, drama, and stress. In order to have great success though, you should put some thought into a few things before you jump into a relationship with a property manager. We’ll be releasing a series of helpful blogs that will tie into each other surrounding this topic, but for now, kick back and enjoy reading the 5 steps to pick a property manager!
Property Manager – A property manager is a person or firm charged with operating a real estate property for a fee, when the owner is unable to personally attend to such details, or is not interested in doing so.
Step 1: Decide if you the time & patience to self-manage
Step 2: Decide on your goals for the property
Do you just want to have it as pure investment, heads-in-beds? Are you planning to use it more and care about experiences and property care? I’m not saying you cannot be profitable, but understanding your own expectations is going to help you in picking a manager that aligns with your views. How involved do you want to be?
Step 3: Interview large AND small companies
We each have our advantages/disadvantages. Small companies generally have better, more consistent hands-on service. They know your property well, and they know their guests staying. We have smaller marketing spends/reach (hasn’t impacted income though); we may not have a live agent sitting at a desk waiting on a call to come in. We’re boots on the ground. Do you get prompt responses from us? Yes. Bigger companies on the other hand have more staff – they can spread themselves further. They may have cheaper rates because they operate in bulk. BUT, does that mean the quality is there? You have to do that research. Do you want to be a number….lost in the sea of fish…or do you want to stand out and pair with a smaller firm? There’s a management company out there for everyone
Step 4: Once you have 3-5 companies on your list, read their reviews & compare apples to apples
If they don’t post reviews on their Google or direct websites, that is a ginormous red flag. Any business development person can sell ice to an eskimo. It’s what they are hired to do….read what actual guests have to stay about actual experiences. That’s first-hand proof and no sales tactics involved.
The second part of this decision is comparing apples to apples on numbers. I always chuckle when I see folks scrounging for the bottom of the barrel on commissions. That doesn’t answer your full question of projecting NET value.
Step 5: Pick a property manager and enjoy the ride
Communicate. Ask questions, don’t assume. Stay involved with what you can be doing to help your property stay profitable. It’s like dating – honestly. You are in a relationship with your property manager. It involves a lot of learning, trust, and transparency. If you or he/she doesn’t communicate well, it’s a disaster in the making.