Do you have one property or several properties that you rent? Whether your properties are commercial or residential, renting them out to tenants will generally be much easier with the help of a good property management company. A property management company can help you with a variety of landlord and property related tasks. These may include (but are not necessarily limited to) collecting rent, screening potential tenants, and performing repairs and maintenance.
However, it is important to remember that not all property management companies offer equally impressive or helpful services. You need to carefully weigh your options when choosing which property manager to hire. Don’t be fooled by companies that advertise the use of the latest mobile technologies and applications. While technology plays an important role in property management, it takes more than technology to run a good property management company.
Here are seven factors to consider when choosing a property management company.
1. The company makes use of technological innovations.
Technology alone is not enough to make up for poor service. You don’t necessarily have to work with a company simply because it is the one on your list of options that makes the most extensive use of new technology innovations.
With that said, it is critical that a property management company leverage technology to some extent as a means of attracting and satisfying tenants. Fortunately, the ways in which a business can do this effectively don’t have to be especially remarkable or expensive.
For example, today’s renters prefer to be able to pay their rent online. This is much more convenient than mailing a check or handing over the rent directly to the landlord each month.
Therefore, you should look for a property management company that uses technology to make life easier for tenants. Green Residential in Houston, Texas, is an example of a property management company leveraging technology to support its clients.
At a minimum, your property management company should use technology to collect rent online. The best rent collection software will require tenants to pay their rent in full. Partial payments are not accepted. The software can also automatically deduct rent from a tenant’s bank account … with their permission, of course.
2. You are impressed by your effective marketing.
One of the best ways to determine if you should work with a particular property management company is to evaluate their marketing content as if you were a potential tenant.
When reviewing a company’s marketing materials, try to get out of your customer mindset. Think of the content as if you are considering renting the properties that are being marketed to you.
Does marketing content make a property attractive? Why or why not? By simply thinking about how a business markets its assets from a prospective tenant’s perspective, you can get a clearer idea of whether a business can be trusted to market its properties effectively.
If you wouldn’t rent the properties as advertised by a property management company, you may have a hard time filling your vacancies with that company.
3. They have a great familiarity with the area.
It usually helps when your property management company has a reasonably long history of managing properties in the same area as your rental. Property managers who know the area are more likely to understand which tenants in that area a particular region wants. This can help you find the ideal tenants for your properties much faster.
For example, if your property is in a rural area where having well water is a priority, your well should be a prominent key feature for every prospective tenant.
Likewise, if your area is a popular destination for families, your property management company should market your property to families. The same applies to attractions such as museums, parks, monuments, and job opportunities.
4. Your management techniques demonstrate versatility.
The services offered by a property management company can vary from company to company.
Naturally, the most important thing when hiring a property manager is identifying a company that is truly trustworthy. However, if possible, you should hire a reputable company that also offers numerous services that not all property management companies can provide.
The more work a property manager can take from you, the less time you have to spend on tasks that can distract you from your other sources of income.
Obviously, you should look for a company that offers the essentials. These include rent collection and eviction services. With that said, it is also helpful if the property manager can help you with other tasks that renting a property may involve. These may include conducting inspections, background checks, etc.
5. They have extensive knowledge of state and federal housing laws.
Violating state and federal housing laws can get you in trouble quickly. All it takes is a complaint to HUD or your state attorney general’s office to initiate an investigation.
If a tenant reports their property management company to a government agency and the complaint has merit, they will experience some of the consequences. While your property management company will likely have to deal with the situation, you may still be in trouble as a homeowner.
When a situation reaches a critical point and causes a tenant to move out, they will end up having to fill a vacancy. If your property management company broke the law, you probably won’t be using them to fill your vacancy … which means you’ll be on your own.
6. The company enjoys excellent tenant relationships.
Although many landlords are moving toward a hands-off business model, there still needs to be landlord-tenant interaction. A good property management company will have great relationships with their tenants, even if all communication is done online.
When a property management company has a great relationship with its tenants, you know that you will be in good hands with their services.
Nothing creates problems and lawsuits faster than poor landlord-tenant relationships. You want to avoid these problems at all costs. When tenants resent their landlords, they are more likely to destroy the property. They can withhold rent, violate the terms of the lease, and resist legal evictions.
7. They are not afraid to evict tenants (legally).
One sign of a great property management company is that they do not tolerate disrespectful tenants or any kind of nonsense. You want a property management company that holds tenants accountable for their lease. They must be willing to enforce the agreement no matter what.
Evictions are never fun for anyone. While you want to avoid evictions, you need a property management company that is not afraid to alert bad tenants. The longer you stay with a problem tenant, the more difficult it will be to get rid of.
When considering a property management company, ask them how they handle evictions. Ask them to explain state laws to you so you know they know. If they can’t explain state eviction laws, you may want to find another company.
Tenants who are illegally evicted from their homes often obtain the right to remain in the unit indefinitely during the court hearing. If this happens to one of your rental properties, it will be more difficult to get out of your tenant, even for legal reasons.
Take the time to choose your property management company.
There are many property management companies to choose from. However, you cannot afford to make the wrong decision.
Whenever possible, check out each potential company. For example, check your Better Business Bureau (BBB) rating. See if anyone has filed a complaint against you.
Take your time. Identifying the right one for your needs can make a big difference in how profitable your rental property can be. Hopefully, the tips above will make your search for the ideal company much easier.
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