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Property managers are just like any other professional trade. You have some good ones, some bad ones, some that are burnt out, some that are new and trying to get started, and some that are just mediocre. There are things that I always suggest to clients to look for when selecting a property manager, and while you may not find one with all the qualities, traits, and skills that you want, it is important to get one that you feel is best suited to work with you and your ownership/investment style.
With that said, here are some of the most desired traits I recommend in looking for a property manager:
Licensed real estate agent - Most states require property managers to be active licensed real estate agents. Those who manage property and are not licensed real estate agents are most likely practicing real estate without a license, and that is a crime punishable by fines and other measures of the law. The way some people do this without a real estate license is that they are direct w2 employees for a larger property company. That is the only way to manage property that you do not own for someone without a real estate license is to be a w2’d employee of the owner.
Type of experience - A lot of managers will tell you that they have experience (and maybe they do), but often it’s not the type of experience that is needed. There are so many different property types, and each type requires different management styles, so you want to make sure you are finding someone with experience in your type of property. If you own older “C” class type housing (if you are not familiar with property grades, see my blog about how to grade your investment property) but the only experience they have is with newer class “A” products, then chances are this manager is not going to be a fit for your portfolio.
Do they own property themselves – For me, this is one that I think is important. I have found that the experience I got from being an owner of property myself has been invaluable. I equate it to the same lines as would you trust a cook who never eats their food type of thing. Other property owners know the struggles, hardships, risks, and the importance of budgeting and preparing for issues that arise. I fully endorse using a property manager who also has (and is currently) walking in the same shoes as ownership as you are.
Property management software – Make sure that whatever manager you use has good software that is easy for you to understand the reporting from. I’ve seen too many property management reports come out that are hard to understand and follow, and this leads to other problems that could cost you, the owner, thousands of dollars and wasted time. Ask them to see a sample report, and then ask them to schedule some time with you during your first few reporting cycles so that you understand how the reports flow. In addition to the reporting, make sure that your manager offers you online portal access so that you can check things on your own time as opposed to having to wait for them to reply with information. Speed of info will often help alleviate problems and allow for quicker decisions on other important items.
Report release and frequency - At a minimum, property managers should be releasing monthly statements to the property owners, but more importantly, when they release them. If they are 40 -60 days in arrears of reports, this could cause problems if expense issues are piling up that you are not finding out until it’s too late. Ideally, you will want to see a report no later than the 15th of the month for the previous month, and any sooner than that, consider it a bonus. Be sure before you sign a contract with a management firm to ask about this and find out when they release their statements and, more importantly, when they pay you
Here at C.A.P. Property Management, we use software that not only has owner portal access but is very user-friendly. We also believe in speed in getting info to our owners, so in addition to updates during the month about big expenditures that are coming due on the horizon, we also get our clients out their statements within 5 days or so of the month for the preceding month. If you would like more information on our reporting and what we can do for you, please email using the form below for a free consultation.
