Investing in the rental property market has the potential to be a very profitable venture however it’s not as passive as some people will lead you to believe. Engaging a property management company to manage the tenancy and all the tasks that go with it is the preference for most investors. Most rental property owners actually have day jobs, so they don’t have the time to dedicate to looking after tenancies. Choosing the right property management can seem like a daunting task if it’s your first time. On the surface they speak the same language in their marketing, touting the same values and professionalism however when you dig a little deeper some are far more reputable then the rest. Here are a few tips on how to select a property management firm.
Licensed?
The first thing to check is that the company has the correct license or is a member of a registered authority for their area of operation. Each country and indeed area is regulated differently so make sure you know what the standard required is and start with the businesses that belong and have the appropriate licenses.
Property Type
A good question to ask is does the business specialise in a particular type of property e.g. condos aka apartments and are they managing residential or just commercial tenancies. A business managing the same type of property as yours will have more access to tenants and experience with any issues that may occur.
Get References
Do the due diligence before selecting a property management business. Ask for customer references from satisfied customers. There may also be reviews of the company online so it’s worth doing searches in google and social media.
Management Process for Rent Collection and Payment
Businesses manage the process of rent collection and payment differently so even if you’ve had prior experience with an property management firm it’s best to understand just how this business does it. It is collected weekly, or monthly and when do you get paid. It will affect your cash flow and may be a game changer should you prefer weekly payments and you’re expected to wait a month. Also find out how they deal with tenants who don’t pay their rent on time.
Property Inspections and Maintenance Requests
Your property should be inspected every 3 – 6 months and there will be occasions when repairs are needed. If the property is located in southern California, there’s a orange county property management company that will be very hands on and care the inspections and manage the maintenance requests too. The decision you’ll need to make is whether to be consulted before all repairs are made or if the repair cost is under a dollar limit like $300 then the property management company has the authority to go ahead and get the job done otherwise they will need to ask for approval. You will need to make sure that the company you have chosen will be able to accommodate your preferences of how inspections and maintenance is managed.
Tenant Selection
One of the main reasons for electing to outsource the management of your rental property is so the property manager does the tenant screening and selection. A good screening process can help to avoid issue down the line with non payment of rent and possible damage to your property. Ask what process the business has for tenant selection. It should include thorough credit and criminal record checks. Bad tenant selection is what Landlords fear most.