Property investment is like having your own business. So as a property owner, it’s crucial to ensure that your property operations run as smoothly as possible.
That’s why you need to hire a property manager who can handle the day-to-day operations and maintenance of your property while actively responding to your tenant’s needs.
But as much as you need a property manager on your team, rushing the hiring process is not the way to go. Your property is probably your biggest asset, and you don’t want to have it managed by just anyone — you need to be sure that they’re good at what they do.
Good property managers will handle your property with your best interest in mind, so you can rely on them to make smart decisions on your behalf, keeping both you and your tenants satisfied and ultimately driving your investment to success.
That said, finding the right property manager can be difficult. But if you really want to make impressive returns on your property, it’s something that you have to do and need to get right.
What is a property manager?
According to Investopedia, a property manager is “an individual or other entity that is hired by a property owner for the purposes of overseeing and managing daily operations of the property or properties.”
Since they act on behalf of the owner, property managers ensure that the rental is being managed according to the owner’s guidance.
The guidance given by the owner can take different forms. Corporate property owners typically issue mission and vision statements for the property managers to follow, while individual owners usually communicate their goals verbally.
Given that property managers can have a lot on their plate — from collecting rent and ensuring it’s received on time to maintaining the condition of the property so it always looks brand new — hiring one can be expensive.
Traditionally, they collect 8% to 12% of the monthly rent, but the rate can be higher or lower than this average, depending on the size, type, condition, and location of the property.
The cost of hiring a property manager is seen as its biggest disadvantage, but the value they add to your property weighs more than its price.
So despite the cost, having a property manager is a great option for you if:
- You don’t have time to manage the property yourself
- You live a long distance from your property
- You own several properties
- You want your investment experience to be more passive
- You don’t know how to manage it by yourself.
Whether one, two, or all of these reasons apply to you, hiring one is worth it in the long term.
What does a property manager do?
Simply put, a property manager handles everything relating to the daily operations in a rental property and ensures that all the goals that you (the owner) set are being met.
To be more specific, here are the main duties of a property manager:
- Setting and collecting rent. Property managers are in charge of setting competitive rent prices, which they can determine by comparing prices of similar properties in the area. They are also tasked to set up a rent collection system (e.g. setting deadlines) to make sure they receive the payments on time.
- Advertising the property. A good property manager will ensure that your property is well-advertised, so that you have a higher chance of renting to an ideal tenant. Apart from online advertisements, property managers should also professionally handle open inspections.
- Screening and managing tenants. It will be your property manager’s task to screen potential tenants to make sure that your property will be occupied by responsible and trustworthy people who pay rent on time and take good care of your property. Your manager will also have to manage complaints and handle tenant move-outs or evictions.
- Maintaining the property. Your property manager needs to ensure that your property is in good condition. They will be responsible for regular maintenance and emergency repairs (e.g. inspect and oversee work done by contractors and trades people).
4 tips on finding a good property manager
Seeing that property management is not easy, finding someone who can do this job properly can be a challenge.
So to help you find the right property manager, here are four tips to follow:
1. Identify what you need in a property manager
Property managers are there to manage operations according to your goals, so the first thing you need to do is to set these goals.
Doing so allows you to have more concrete criteria for the property manager you want to hire. From there, you’ll be able to:
- Set a price that you’re willing to spend on your property manager – Remember that cheaper is not always the best approach. If you’re going to ask them to go above and beyond what a typical property manager does, be prepared to adjust your price accordingly.
- Know what experience level you’re after. Hiring a property manager at the beginning of their career will be cheaper and they can offer a fresh perspective, but you also need to consider that a property manager with more professional experience will know what they’re doing a lot better than someone new to the industry.
- Understand if they’re familiar with the area your property is located. They will likely find it easier to set more competitive rent prices if they’re already familiar with the market in the area. You might also want to consider if they live near the area, because that means they can easily travel to the property when needed.
2. Search for your property manager
Now that you know what you need in a property manager, it’s time for you to look for those who match your criteria.
There are several ways to go about finding your potential property manager:
- Word of mouth — Many people invest in property, so if you know someone successful at it (like a relative or a friend), they should be able to refer you to good property managers
- Online sites — There are a number of websites such as LocalAgentFinder and RateMyAgent to find highly rated property managers and check their fees.
- Real estate agents — A good real estate agent will have a strong network of property managers they know and trust, so they will be able to refer you to one.
Make sure that you have around two to five candidates that you’re happy to interview.
3. Interview your potential property managers
Now that you have a few to select from, you need to prepare the questions you want to ask them to be able to get a sense of their personality.
The one you hire must have a personality that complements yours — you’ll be working together after all.
Here are some questions to ask them:
- How many properties are they currently managing? (i.e. if it’s too many, they might not be able to give enough attention to yours)
- How will they report back to you as the owner? (i.e. calls or emails? How often – weekly, monthly?)
- How do they deal with bad tenants or situations?
- Will they give you a written proposal? (i.e. Sometimes verbal confirmation is not enough. Giving you a written proposal will show their professionalism.)
- How do they normally screen tenants? (i.e. they need to have a system for checking prospective tenants’ creditworthiness, rental history and current employment)
- What is their system for setting and collecting rent?
4. Do background checks on suitable property managers
After you’ve done the hard work in finding a property manager, you need to do your due diligence to make sure that who you’re about to hire isn’t “all talk and no action”.
Their performance on the job needs to reflect how they read well on paper and excelled in the interview.
To do this, you can:
- Read Google reviews of their services online.
- Ask to contact previous tenants and landlords (If your prospect is against this, that might be a bad sign).
Finding a good property manager can be a tedious process, but if you want your investment to succeed, having one to work with you will add a lot of value.
If you have a good property manager, you can rest assured that they will work for your interests and not their own, make sure that your ideal tenants are satisfied, and work in an easy and straightforward way with both you and your tenants.
Working with a property manager who is competent, trustworthy, and reliable will make your role as owner more passive, giving you more time for your job, hobbies, and loved ones.
If you want to learn more about finding the right property manager for you, contact us.