Hey Mario Gonzalez here. We get this question all the time so I figured I’d put it in a video. “How do you as an owner get the best property management company for your rental home or investment portfolio?” Well, it’s not as simple as you think so I’m going to give you seven things you really need to look at before you pick a property management company. What most people do is go to social media and ask a friend, “Hey, do you know anyone or have a recommendation?” Well, just know there are limitations to that. You’re talking about one person with one home and one management company and they’ll let you know honestly how it went, but that doesn’t give you a broad enough look to know how they handle things on the grand scheme. So we’re going to give you seven things you can really arm yourself with to select a property management company.
#1 LICENSE AND QUALIFICATIONS:
Are they licensed and qualified to even manage homes? So, all real estate agents are not qualified to manage homes, but every property manager should be a licensed real estate agent. Then you ask them ‘what kind of qualifications they have, how long have they been doing this, how many employees do they have, how many people will you contact, how many homes do they manage, do they do tenant placements, do they do evictions’. You want to know what all they do, what they’re qualified to do (commercial/residential/HOAs), do they do collections, etc.” You want to ask all of those questions. You also want to know ‘what their rates are, what kind of vacancy rate do they have, what kind of eviction rate do they have’. They may have been doing this a long time, but if they’re evicting one of every four tenants, that’s probably not a great thing. What kind of credit selection do they use? So, you want to ask all those questions to really kind of qualify and make sure that they’re properly licensed. Now, one thing you can start doing online, and this leads to part two, is researching what kind of certifications and designations they have.
#2 PROFESSIONAL DESIGNATIONS:
You can look for people who are only certified property managers or have been designated as certified property managers and you can find the CPM, the RMP (Residential Management Professional), MPM which is Master Property Management and is the highest certification you can actually get in the property management realm. So, look for those people who have a Master Property Manager designation. That’s going to be your top tier.
#3 INDUSTRY AWARDS:
The third thing is what kind of awards have they gotten, have they gotten any awards at all. If they have gotten awards like the Property Manager of the Year Award, the Property Management Company of the Year. What awards have they gotten that says, “Hey, not only are we licensed and designated to do this, but we’re getting awarded in our industry to do this.”
#4 PROFESSIONAL ASSOCIATIONS:
So, the fourth thing you’re going to look at is what kind of professional affiliations does this company that says they’re going to manage your home belong to. Where are they getting their information, where are they getting their continual education? They need to be affiliated with professionals and like minds across the nation that are in the property management realm. So, in the residential side here you’re going to look for what we call NARPM, and in the commercial side you’re going to look for IREM and both of those deal with ‘what’s changing in codes, regulations, laws, you name it, policies, directives, governing directives, and what is changing. They will constantly educate those professionals that are affiliated with those organizations. And if a property management company isn’t, then they’re really kind of doing it in the dark and blind about it and it’s like ‘oh, yeah I’m managing homes, but I’m really not staying educated about how things are changing’ and that brings more risk to you as the owner. So if you want your risk lowered you need to have a property manager with a higher education and be affiliated with these groups.
#5 ONLINE REVIEWS:
Now in part five you’re looking at the reviews. What do other people, not just one person, but what are other people saying across the internet on this company? So, when you look at reviews there are two different things you look at. One is an owner review, then there is a tenant review. You want to know ‘hey, are the owners happy’ and that’s the main thing. A tenant, often times, when they’re held accountable they’re not so happy. They’re not so happy when they move out and leave the home wrecked and the property manager says, “you know what Mr. and Mrs. Tenant, you’re paying for all that”. The tenant may very well go online and leave that negative review. It’s okay. The property manager is doing the job for you, the home owner, and that’s who they work for, they don’t work for the tenants. So look at the reviews, but differentiate from the tenant versus the owner. There should be some negative reviews in there. Nobody has a 5 star review, and know that Google reviews and Facebook reviews are pretty easy to look at. Some of the Yelp reviews get buried, some of the good reviews, so you have to click the little ‘see more reviews’ to see those type things.
#6 POLICIES, PROCEDURES, & AFFILIATIONS:
Alright, number six. You want to really dig in now. You’ve gone into the first five things and you’re talking to a property manager really you want to get to the nuts and bolts. What kind of policies, what kind of procedures do they have, do they rent a home before it goes vacant or after it goes vacant because after it goes vacant it’s easier to show, but you’re paying money. You’re paying the lights, you’re paying the mortgage without anything so you need to ask those questions. What do they charge for, what does their fee structure look like, what kind of professional affiliations do they have. Are they linked with lawyers, and title companies and vendors that are all licensed and insured? Who’s doing the work on their home? You really need to dig in and ask about that policies and procedures how they manage your risks because that’s what they’re doing. A property manager should reduce your risk.
#7 PRICING & FEES:
And then the final thing, and this is the minimal thing, is the price. Be very weary of those companies who say, “hey, we’ll manage your home for a ‘teeny tiny’ price” without thoroughly looking at the scope of services. I’ve been managing homes for a long time and I will tell you if there is a ‘teeny tiny’ price then they’re most likely giving you ‘teeny tiny’ service that’s not going to match with the policies and procedures of the companies that are professionals and they do this and they’re in the trenches each and every day. They may collect the rent for you, but that’s it. You need to ask if they have “boots on the ground” in your area. Can, they go out and see that home, can they answer questions directly with the tenant without calling that 1-800 number, etc. If not, you really need to think if that’s right for you. But then again, always, price is going to increase with the level of services that you get, that’s just natural. But look at all companies comparatively. You don’t have to look necessarily at the highest, but look at companies that are offering a good deal of things in their policies and procedures I just talked about for an equitable price.
That’s pretty much it in a nutshell… the seven things. License & Qualifications, Certifications/Designations, Awards, Professional Associations they have, Reviews out there, and then the Policies and the Price. So take a look at all those things and you’ll know ‘hey, is this property management company really right for me’. If you have any other questions, feel free to either see some of our blogs or call me direct at the number on your screen.