Here's the Top Five things to consider before hiring a property manager...
1) What is the company's policy on tenant screening?What does that process look like? It is crucial to hire a property manager whose focus is tenant screening. By focusing on tenant screening, it is possible to reduce the risk in renting to a problem tenant.
2) How is maintenance handled? A prudent property manager reduces the "work" that a property owner has in dealing with the property. So long as the property manager has the authority to take care of routine maintenance, the property owner can benefit from the resources available to a property manager. It's also important to remember that "you get what you pay for." By going cheap or cutting corners on repairs, it ultimately costs the property owner more in the long run. By fixing it right the first time, it costs less for the property owner and keeps the tenant happy.
3) How are rent increases handled and determined? It's no secret that a property owner wants the most amount of rent possible and the renter wants to pay as little as possible. A successful property manager is able to guide the property owner in setting a fair price for the rental to maximize income, while setting it low enough to reduce vacancy time.
4) How involved does the property owner want to be? A property owner that wants to be hands-on and intimately involved in the management of the home, may actually hurt the success of the leasing and management of the property. A successful property manager is skilled in their trade and know how to best get the results desired by both the property owner and themselves. I use the example of hiring a lawyer or CPA; we hire them because we trust they can do a better job than we could ourselves.
5) What if the rent doesn't cover the mortgage and other property expenses? The rent that can be expected of a property is dictated by the market. A homeowners mortgage and expenses bears no weight on the rental value. However, it's imperative to keep in mind that the rent is typically covering a huge part of the expense. When we can get another person to help offset the expenses on a property, we are actually having that person buy the asset for us. That being said, if a person cannot cover the difference between the property expenses and the rent collected, then they need to reconsider being a landlord.
Lee Arnold is a California BRE Licensed Broker in Southern California. Whether you're looking to buy, sell, or lease real estate, Lee has 15 years of experience in this field. Lee is available for speaking engagements as consulting opportunities. To contact Lee Arnold: www.benchmarksocal.com.