Real estate investment is a great way to create passive income, but if you’ve decided to manage your rental property yourself, you are an active participant. You’re a landlord, accountant, maintenance supervisor, and more.
One of the smartest things you can do to both protect your investment and spend less time managing it is to hire a good property management company. Property management professionals make critical decisions on your behalf, so it’s important to choose a professional you can trust.
The Benefit of Working with a Property Management Company
Hiring a property management company has many advantages. To determine if hiring one is a good decision, consider if any or all of the following apply to you:
- You have multiple properties and or you don’t live near your rental property. The more rental properties you own, the more you will likely benefit from a management company. For an out-of-the-area property, the right company can prove invaluable in dealing with the multitude of issues you cannot handle from a distance.
- You prefer a hands-off approach. If you want little or nothing to do with the day-to-day operations of managing a rental property, consider hiring help.
- You’re overwhelmed or your time is limited. If managing your investment property is not your full-time job, you may find it becomes one. Even if you enjoy being hands-on, you may need a substantial amount of outside help to effectively manage a rental.
- You can afford the cost. Yes, property management companies charge a fee for what they do, but they earn it by handling everything including lease signings, rent collection, maintenance and repairs, and evictions. Find out how much you should plan to invest in property management services.
So, is hiring a property management company for you? If yes – and before you sign on the dotted line – follow these steps to find the right one for you.
What to Look For
It isn’t enough to hire just any of the many San Diego property management companies. It’s vital to find one that is licensed, professional, reputable and well-established. That takes a lot more than mere luck; it’s about knowing ahead of time what to search for. Here are the top traits you need to look for when searching for a professional property management company.
Client Base & Reputation
Top of the list: a professional property management company will have a solid reputation. First, take to the internet to conduct research on the companies that interest you. Investigate state or local government agencies and check out online review sites. Keep in mind that nearly every review site contains negative reviews – weigh them carefully with the number of positive ones. Do a Google search for posts in forums and look for consistently high marks from a good number of people.
When it’s time to vet a particular company, don’t be afraid to ask how large its client base is or for references from some of those clients. The more willing a company is to share this information with you, the better the chance that it is well-connected with the community.
Strong Policies & Screening Procedures
Any solid, legitimate property management company will have processes in place that they’re more than happy to share with you. Ask about their routine maintenance service, past-due rent collection policies, and after-hours emergency procedures.
It only takes one bad resident to cause real chaos for your rental property. Look for a company that has a comprehensive resident screening procedure in place. At a minimum, it should include background, reference, and credit checks. Ask about its anti-discrimination policies, as well.
Broad Property Management Experience
Find a property management company that is well-established and has extensive experience in hiring the right professional for the right job. It may sound simple, but you want someone who understands there are times when all that’s needed is a handyman, not a professional contractor. Over time, the costs for such errors will add up. You want a company that will make smart financial decisions on your behalf.
Part of being a highly-experienced property manager is developing a track record of short vacancy periods. Ask a potential management company how fast they get properties on the market. They should be happy to oblige.
For more questions, download our free guide:
The bottom line is, you want a full-service property management company that is experienced in handling it all – advertising, marketing, resident relations, rent collection, leasing and maintenance and repairs. It is well worth your time and effort to fully vet any potential company. After all, you want them to be able to handle the full scope of the work that’s required. That’s the best and only way to get the most of out of your investment rental property.