Whether or not an investor manages their own property it is very important that they know the management rules for that state and that they ensure, if they have a property manager that the rules are adhered to.
The way that a property manager looks after an investment property can make a big difference to the profit return of an investment property.
Below are listed some of the problems that can be encountered with a bad property management:
1. Rents can accrue and will be difficult to recover, which could lead to expensive legal proceedings.
2. Tenants damage the property unknowing to the property manager because inspections are not kept up to date
3. Maintenance is not kept up to date and over time what would have been ‘repairs’ become ‘replacements’ which is a much more expensive exercise
4. Rents are not achieving full potential because the property is not as attractive and competitive as others on the market due to it looking ‘tired’
5. There is major damage to the property and tenants are not removed promptly
So to ensure that your property will be managed properly here are some tips:
1. Research the area and find out who the good property management teams are. Speak to them and interview them to find out exactly what services they offer and what charges they make.
2. Check that they send you monthly reports and three monthly inspection reports. Check to see if they send digital photos if required.
3. Tell them that you would like to inspect the property with them at least once a year so that you can personally keep updated.
4. Discuss with your property manager your purpose for owning this property as regards cash flow, costs, future goals (rehabbing or freshening up between tenants, etc) so that they know exactly how you want the property managed.
5. If you find that you cannot get the satisfaction you want from a property management team do not hesitate to dismiss with them. Before you do though, make sure that it has not just been poor communication that has caused the problem and one which can be fixed quite easily. there is no point in keeping on with bad management and the situation becoming worse. Make sure that you are keeping up your end as regards maintenance and communication as well.
As a property investor you are in the business of property investing to make money so you do need to ensure that it is running as a business. You need to treat the property manager as an extension of your business and ensure that there is good and frequent communication between both parties.