Before you invest in either residential rental real estate or commercial real estate, you have to make sure you have maintenance covered. Your prospective property is going to need maintenance – your property is not going to remain in shape for long. From wear and tear to visitors or customers causing damage, your property will need work done.
You’re doing great if all your property needs is a repainting every few years. More likely than not, it will need something more substantial than a fresh coat of paint. To add to your worries, you will also have to field calls from your tenants regarding all sorts of issues with the space they are renting-from complaints about leaky roofs to toilet issues to drainage. Excited yet?
If the whole idea of property maintenance is beginning to stress you out, you should take a deep breath. You don’t have to take on these hassles yourself-unless you want to. Most professional rental property owners who own a decent number of units hire property management companies to handle their headaches. Not only does the property management company handle repair and maintenance issues, they also take care of collecting the rent and dealing with upset tenants.
Best of all, these companies’ charges are a percentage of your total rental income. They are a business cost, and that’s great news come income tax time. In other words, property management companies are lifesavers for the rental real estate investor.
But before you kick back and put your feet up on your desk and start dreaming of the rental cash that comes in month after month, you have to figure out how to pick the best property management company for your business. Read the guide below and get the information you need so you can pick the right property management outfit.
Look for a professional infrastructure. Don’t settle for a company whose doorman is the security guard who is also the receptionist who is also the handyman. While there is some space for mom and pop types of property management operations, you might not get the quality repairs, upkeep, and tenant relations your property requires. Look for companies with specific job levels, specialized staff and fully documented work processes.
Proper Insurance Is Key
What happens if there is a fire caused by the negligence of the property management personnel? What happens if a tenant floods his or her unit due to the screw up of the property management company? While you should always be insured, don’t just let your insurance take the hit. Make sure the property management company you hire has adequate insurance coverage so you don’t end up losing peace of mind.
Look at Past Clients and Performance
Just like picking out a dentist or lawyer, talk to your prospective property management company’s past clients and look at their past performance. A pattern of great service should arise. If it doesn’t, skip the company and find another.