My No. 1 mistake in property management was not hearing about successes but hearing about failures.
By Larry Arth
Hearing about peoples failures is the fast track to learning.
When you hear of and understand where people have made mistakes you can use their lessons to your advantage and avoid duplicating that mistake.
Most true real estate investors invest in the best locations and therefore use a property managers to run their business.
A property manager is to your investment as your engine is to your car.
As these property managers are the bridge between you and the investment it is imperative to choose them wisely.
I speak from personal experience when I say they can make or break your investments.
My No. 1 mistake in property management
Not actually hiring a property manager may be your biggest mistake. It was mine. It was my No. 1 mistake in property management.
Being a true investor requires focus on the business building aspect of investing. This process can easily be distracted by managing the tenants. Hiring a property manager and letting them do what they do best, property management, will allow you to do what you do best -invest in sustainable investments.
Think of a property manager as the engine to your vehicle
A finely tuned car will get you to your destination, trouble free. Your property manager should do the same and get you to your Investment destination trouble free.
Over the years I have been able to hone the craft of hiring great property management. So to help you avoid some of my painful experiences, here are some serious questions you may want to ask about your property management.
Questions should be broad based and focused on finding great tenants, then onto property management and finally tenant management
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- What is your portfolios vacancy rate and how does that compare to the markets average?
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- What is average length of time to fill a vacancy?
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- Is this average time getting longer or shorter?
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- Do you use your website to keep tenants informed and to attract new tenants?
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- How do you market your rentals?
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- What factors would make you reject a tenant?
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- What tenant qualifications are most important to you?
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- What screening method do you use?
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- How do you collect rents?
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- What is your late rent policy?
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- What rules do you set for tenants?
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- What percent of tenants do you have to evict?
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- How do tenants contact you?
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- What is your eviction process and what are the fees involved?
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- What maintenance issues do you handle in house and which do you hire out?
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- Do you simply pass on the bills or do you have price mark ups and if so how much?
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- How many quotes do you get for jobs?
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- What are the rules for contractors being inside the units?
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- Who are your preferred contractors?
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- How long have you been a property manager?
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- Do you have any certifications?
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- Does your locality require any licenses or permits to run landlord tenant housing?
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- Do you personally invest in real estate in this area?
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- What is your fee structure?
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- Are your reports web based?
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- How long of notice do you give before terminating a contract?
There are a number of questions you can ask.
Ultimately you want to learn as much as you can to ascertain their knowledge and experience in the land lording business.
Another thing to do is to look for telltale signs of professionalism and organization.
How messy and cluttered is their desk?
How hard it to reach this person and do they respond to your calls quickly?
About the Author:
Larry Arth is the founder and CEO of Equity Builders Group, a Florida based Real Estate investment Group. As a 36 year veteran to real estate investing, Larry understands that we are now in a global economy and as times have changed, investment strategies must change as well. Larry is an international recognized consultant and speaker and assists hundreds of investors per year, both foreign and domestic to realize their investment potential. He analyzes locations across the country for economic strength and the locations that yield the largest most sustainable return on investment. Within these locations he seeks out and gathers the best teams to deliver sound, high performing and most importantly sustainable turnkey investment. He works with investors to ride the wave of each area-specific market surge. Larry’s primary focus is offering (Non Listed) safe and sustainable turnkey investments to the passive investor.
