Many individuals have asked me over the years what the most crucial aspect of real estate investing is in my perspective. Everyone assumes that the market’s price, location, and timing are all correct. I can tell without a doubt that property management is the single most crucial piece of the investing jigsaw after over 1300 real estate sales mostly to investors throughout the world. You can make a price error, choose a risky location, or hire a terrible contractor and still earn a profit in real estate. If you choose the incorrect property management, you could lose your shirt in an instant! Don’t get me wrong: location, pricing, and rehab are all significant aspects in real estate investing. You may make a mistake or endure a downturn in a market or area with the correct property management business in place, and still get a solid return on your investment through positive cash flow. Long-term, a smart property manager preserves your investment.You can get additional information at Polaris Property Management, LLC.
Obviously, “how do I locate a good property management” is the following question. Here are some pointers on how to choose a decent management firm. This does not necessarily imply you; your property will be managed by someone else.
Obtain a recommendation. When you invest, there are usually others in your peer group or circle of influence who are investing in the same market as you are or who know someone who is investing in the same market. Inquire about who they currently use, who they previously used, and why they switched. Find out what they enjoy and dislike about their management firm, but more importantly, what they don’t like. The management business may perform an excellent job of finding tenants, but they fall short on communication; without communication, you’re doomed! For the investor’s piece of mind, having access to your management firm is critical. Nothing is more irritating than leaving a message or sending a few emails and hearing crickets in the background. At first, you suppose they’re swamped and won’t get back to you right away. However, after a while, investors begin to worry why no one is replying, and fear sets in. Is the tenant still there? Is it true that my money was stolen by the management firm? IS MY HOUSE ON FIRE? In most cases, none of the above is true, however a good property manager will react to your inquiry within 24 hours.
Request references from the management firm with which you are considering doing business. I believe you should aim for 5 to 10 references from prior clients as well as current clients who have been with the management firm for more than a year. Pass on them if they won’t give you with any previous clients. CALL THE REFERENCES WHEN YOU RECEIVE THEM. Ask them the same questions about their favourite and least favourite things.
Obtain a policy and procedure list from the management firm. You should know how they handle tenant marketing, late payments, evictions, maintenance calls, inspections, accounting, and owner disbursements, among other things. This information will be readily available in a reputable management firm.
Check to see if the management firm is licenced in the state where you’re investing. In most areas, the property manager must be a registered real estate broker who is held accountable to the state real estate board. Many “property managers” are not, but have taken advantage of the opportunity to enhance their income while the market is hot. DO NOT USE AN UNLICENSED MANAGEMENT COMPANY, EVEN IF THEY ARE CHEAPER! You will be powerless to stop them.