Are you someone who is looking to add rental properties to their investment portfolio? Or perhaps you already own a couple of rental homes or condos, and are looking to expand your property holdings? Then you may want to entertain hiring one of the many property management companies offering their services.
Many real estate investors, when first getting started, chose to do all of the work themselves. They reason that it is part of the fun and challenge of owning and operating rental properties. To interview potential tenants, collect the monthly rent, deal with issues that arise and so on. Let’s face it, if you just own one or two properties, it’s not too tough. But once your portfolio grows to 3, 4, 6 or more properties, hiring a great property manager will be a wise next step. Here is what services, costs and features to look for in property management companies you might consider:
Property Management Companies – Not all the same
Just about anyone can take a property management course and become a ‘licensed property management company.’ Real estate boards offer them in nearly every province and state. Great property managers, however, have a number of features that set them apart from the rest.
A successful history and connections
Great property managers have experience, exposure and market reach. Fancy way of saying: they’ve been around, have a growing book of business with a wide variety of residential properties (houses, condos, townhomes, etc) and are easily reachable by the general public (looking for properties to rent) and by their owners. Look for a property manager who has a few hundred homes or more. However is also has enough staff to respond to issues that arise.
Background checks on tenants
For the basics, you’ll want the property manager to advertise your home, thereby attracting potential tenants. Next, they should do a property credit and background check, to select the most desirable tenant for your home.
Once they have the tenant installed and all set up, you can expect the property manager to collect the rent, keep meticulous records and deposit all profits directly to you.
Look after any issues that come up
Home owners should expect their property management companies to deal with any issues that arise. For example, maintenance or emergency repairs, issues with rental payments etc. For this reason, great management companies have a list of trustworthy and reliable service providers, from handymen, to heating and ac companies, roofers, plumbers etc.
A fair pricing system
Many property management companies charge a percentage of the rent which is collected for each unit. So for example, if your property is rented out at $1200 per month, and the management company collects 10%, they will keep $120 per month off the top. This is great when you have an average valued property. But what about the luxury homes, which might rent for $3,000 or even more per month?
Is it fair that the same manager takes $300+? Doesn’t seem right, especially when you consider that luxury properties often present less problems: Often rented out to doctors, lawyers, visiting professors, etc, these properties generally dont experience some of the issues associated with problem properties: skipped rents, damage to the homes, etc.
Some property managers are offering a ‘flat rate’ per month, no matter how much the home rents out for. You may find this advantageous, so keep this option in mind.
What about vacant times?
Better management companies offer to forego their fee during times when the home is vacant. So that if your tenant moves out, and it takes another month to find a replacement, you’re not stuck paying the management fee for a month when there is no tenant in the home. Very appealing, especially in markets and times when vacancy rates creep up.
Whether you are already in the business of owning rental properties in Winnipeg, or just planning on getting started, give me a call! At the very least I can make a recommendation as to a great local property management company for you to consider. Now please listen to this short message for more info!
Here is the PDF Version of “How To Hire A Great Property Manager”
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