How do you know if it is the right time to hire a property manager? What are the conditions that should make you think about investigating this option? This is not a decision to take lightly. You will first have to ascertain whether this is something that is going to be a benefit for you. If you decide it is –you will then have to go through a lengthy process of engaging the right Centennial property management company to suit your needs and goals.
Asking Yourself Some Hard Questions
The first thing you need to consider is the number of properties or rental units you currently own. If it is more than two or three you should seriously start looking at bringing in a professional to handle your investment, especially if you have a full time job. It is not an ideal situation if you are living far away from your rental properties as you are going to start incurring expenses with going to and from the locations to handle maintenance, inspection and tenant application processes etc. If you are living at a distance of more than 50 miles away, you should be either using a selection of trusted suppliers or seriously contemplate investing in a great property manager.
Managing your own properties could be easier if you are an extremely organized person who is highly effective at administration. If not, you are going to get yourself into a quandary down the line when it comes to keeping accurate records. Be honest with yourself, do you have the 5-10 hours per month to dedicate to each unit?
Being on the Right Side of the Law
Being a landlord is a mammoth task not to be taken lightly as there are legal implications to the role and you must make sure you know the ins and outs of the laws governing rental properties. If you are renting out a property, it is essential to know the intricacies of the federal fair housing laws. You are forbidden to ever discriminate against a tenant or buyer based on their race, color, religion, sex or nationality. If you are selling or renting out a residential property anywhere in the United States, the FHA will apply to you. The United States Department of Housing and Urban Development (HUD) are tasked with enforcing this act and there can be hefty fines and even jail time for property owners who do not follow the intricacies of these laws. If your rental property is subject to complex ordinances or an affordable housing program you might want to enlist the help of a property manager because you need to have passed specific certifications to follow the required rules.
Can You Afford the Service?
You might decide that you are too overloaded to be able to effectively manage your properties and need some assistance. But be sure that you can actually afford the services provided by a property manager. You could be paying between 4-10% of your rental income for their services and so you must be sure this is a cost you can carry.
Running on Empty
If you are having an issue with filling vacancies in your rental units, it could be that you do not have the marketing skills to draw in potential tenants. You could end up spending quite a lot of money on marketing in all the wrong places. Often a property management company will have in-house marketing solutions with some well oiled processes for finding the right tenants.
Is the Customer Always Right?
Don’t forget that property management is a service industry –are you a service oriented person? Are you going to be able to keep your cool with loads of maintenance calls and tenant issues? When you hire a contractor to fulfill a maintenance issue do you feel confident and comfortable enough to double check their work? Are you sure you will be able to find the right supplier at the right price? If not, this is another great reason to entrust your rental units to a property manager. The character traits of a brilliant property manager include: friendly and firm, good communication skills, organized, honest and passionate about the real estate business. Do you feel your personality is customer service friendly?
If you come to the conclusion that you do actually need to find a Denver property management company for your needs then you will need to begin a lengthy, thorough process of finding the right fit. You are going to have to do some background research so that you know the list of questions to ask to find the perfect candidate to handle your investment. This is not going to be a quick choice. This is your financial investment at stake and you will need to ensure that the person or company can look after your property properly. A bad decision could cost you a lot of money and an ongoing administrative migraine so put in the required time for the best results. You should take the time to research a range of companies and narrow it down to at least three companies that you are going to interview.
Your research will point you towards the property managers operating in your area and how they are perceived in the industry. Go online and look at various social media platforms to read reviews about their services.
You can even contact the Better Business Bureau to find out the company’s current rating or if they have had any complaints against them on file. You should prepare questions that will elicit information that speaks to their experience in the industry.
Questions could include:
- What fees do they charge and what services do they provide for the fees?
- Are their fees if there are no tenants in a unit?
- Are there any miscellaneous fees for the property?
- How do they determine the rental amount for a unit?
- What day of the month will you receive your check?
- Will they provide you with an IRS-1099 for tax purposes?
- Can they give you advice on tax deductions?
- Do they offer an accounting service that provides detailed records every month?
- Can you see a sample of the monthly report you will be receiving?
- How do they handle their security deposits, how much is collected and what are the conditions for deductions from a deposit?
- Do they make payments for owners for mortgage, insurance, HOA dues etc?
- How often do they conduct inspections?
- Do they offer an eviction warranty or “screening guarantee?”
- How many other properties do they currently manage?
- Are they in possession of a real estate broker’s license or property management license?
- What marketing techniques do they employ to get new tenants?
- Are they certified with a trade organization like the NAA, IREM, NARPM or CAI?
- Under what specific condition could you cancel your property management agreement?
- If you sell your property do you have to list it with their company?
Take extensive minutes or a recording of the meeting so that the points discussed will be in the final agreement. The roles of both property owner and manager must be spelt out clearly.
An Asset for Your Investment
A residential property manager is looking after your business interests on your behalf, so they have to keep you in the loop on any decisions made for your investment. If you do your research and ask the right questions you should find the perfect fit for your investment needs. A well-chosen property manager can be a great asset who will be able to look after your interests for many years to come.