The Fit and Finish of a Property Manager
February 1, 2008
Selecting a property management company doesn’t have to be like throwing darts at a target blindfolded. You have a multitude of things to look at in order to make an adequate decision about whom to hire to manage your rental properties.
Yes, training is vital. Memberships in professional organizations, such as the National Association of Residential Property Managers (NARPM) or the Institute of Real Estate Management (IREM), is essential. And licensing, where required, is an absolute must. You need not even consider a property manager unless they meet those criteria. But you have two other important, but less objective, questions answered to make a decision that works for you.
The most important question is “Do I get along with this person?” If you seem to have a personality conflict with a prospective property manager, keep looking. Dealing with such a person will give you nothing but grief. Your relationship with your management company should be for many years. Make sure it is someone whom you feel comfortable working with.
For example, if he or she is abrupt and you are more easy going, you won =t get along at all. If you get right to the point and your prospective property manager talks all around an issue before getting to the point, you won =t get along either.
The second is “Do you think the same way he or she does?” When you ask a question, you expect an answer you can understand, not some gobbledegook that makes little or no sense and doesn’t even seem to address the question you asked. People who answer questions that way are better suited for politics rather than taking care of your property.
Making sure that questions are answered in a way you understand is vital, as well. Different people have different approaches to explaining things. I, for example, want the bottom line first, then the explanation of how you get there. If someone tries to lead me item by item to a conclusion, I get impatient and I know we won’t get along at all. But some other people are just the opposite. They need to see the whole process unfold before they get to the bottom line. There is nothing either good or bad with either method, it just has to do with how different people’s minds work. But someone who doesn’t explain things the way your mind works will be eternally irritating.
You want someone who has the same attitude toward maintaining your property as you do. Maintenance means renting to people who will be the kind of tenants you demand and making sure repairs get done promptly. If a property manager is more interested in getting a rental commission check and making a fast buck on the lease-up fee, then that is probably someone whom you would be better off without, unless, of course, keeping units full no matter what is how you manage, too.
Your interests come first with a property manager. He or she has a fiduciary responsibility to you and your property. That means your interests come before the property manager’s. That includes no secret deals with vendors where the property manager gets a kickback or gets two separate invoices, one for you and one for him—yours having a higher price, of course. Any markups for things such as repairs and advertising need to be disclosed to you.
The overwhelming majority of property managers do a terrific job for their investment property owners. They take their profession seriously and they know training and continuing education is vital. Just make sure that the one you pick is someone you can work with, thinks the way you do, and, most important, puts your interests first.