The right property management company can easily be a huge help — especially when it comes to large complexes. But, there are instances which bring a property management firm’s practices into question. The biggest advantage to hiring a property management team is to do the work for you. After all, you have a busy schedule to maintain. However, there are times when it might not be the best arrangement.
Reasons to Hire a Property Management Company
Of course, the top reason to hire a property management service in the first place is to take the burden off your shoulders. Another benefit is experience in dealing with problematic tenants. Plus, a good property management firms knows how to screen tenants right.
One of the little understood perks of having a third party property management firm is the buffer from liability. Despite all of the best screening and learning the best practices, it is easy to mess up when it comes to property management. That’s on top of those problem renters that are out to take landlords for whatever they can get. It’s too easy for opportunistic tenants to make false accusations about your rent collection tactics, illegal eviction practices, and negligent maintenance if you aren’t covered. A third party manager can deflect most of that instantly, like a shield. —Fortune Builders.com
Then, there’s the matter of collecting rents and handling repair and replacement needs. All of this, not to mention, dealing with unpleasant situations, like evictions. A good property manager is a proactive one. And, reports back to the owners regularly. These are all good things.
Biggest Signs a Property Management Company isn’t Working Out
Unfortunately, not all property management teams perform the same level of work. Some are excellent and more than worth the added cost. But, when they’re a necessity, such as with a large apartment building complex, quality control can seriously lack. Here are the top signs a property management company isn’t working out:
- There’s little communication. Communication is key between the owners and the management team. You as an investor need to know what’s going on regularly. If the property management service isn’t communicating openly and consistently, that’s a big problem.
- No regular inspections conducted. Regular inspections conducted quarterly are a must, particularly for the exterior and for the grounds at-large. (Interior inspections are also necessary.) If you’re not receiving inspection reports, you’re simply in the dark about what’s really going on.
- Poor tenant interactions and experiences. A good property management company handles tenant interactions well. For example, responding to repair requests or safety issues. If there’s a poor experience, it will manifest sooner or later and when it does, it’s often done a lot of reputational damage.
- Too many bad tenants are getting through. One of the key advantages property management firms bring to the table is effective tenant screening. If there’s an inordinate amount of late rent payments and other problems, this is probably why.
If you’d like to learn more about commercial real estate investment benefits and more about property management, please contact me.