Since your property manger is an essential part of the success of your property performance, making sure your perspective is aligned will further your success. Take them to lunch and discuss the following:
1. Focus on keeping your clients happy
- Since Home is an emotional place of safety and rest, tenants can seem to have exceptionally high standards. However, if you utilize smart software to submit requests and provide immediate receipt of concerns, it can go a long way to keeping your tenant customers happy and staying.
- Ask PM to what degree they utilize smart software in their management, and how is the client’s satisfaction? Appfolio, Buildium and smart property systems are three major players.
2. All Real Estate is local, and PM is no exception.
- The knowledge of each market is invaluable. Costs for Management and expenses can change a LOT in 20 miles, as do rents. Make sure that your PM is carefully understanding the market rents and expenses, as well as keeping a pulse on the radar of the greater area.
- -Often times if your property is in a smaller town, keeping the radius for competition too small can create impression that rents should stay lower; when in reality the demand from surrounding areas can overflow into the smaller towns and drive up rents. Make sure the advertising is wide enough to capture the surrounding areas.
3. Provide accurate management numbers & maintenance costs
- When preparing for a property purchase, the feedback from the property manager in regards to rents is essential. Equally important is their feedback on a reasonable cost to operate the property and their fee associated with ongoing QUALITY management.
- What kind of turnover do they expect, and you need to budget for? This handy calculator from MultiFamily insider can help budget for turnover, but your PM’s experience will be a trusty sidekick to your estimating.
4. Proper accounting is a largely overlooked aspect of Management
- Many owners do not think about accounting as a critical piece of their management, but when it comes time for you as the owner to review your P&L’s, knowing income and expenses are properly captured, structured and depreciated is key.
- Knowing where you can make improvements in reducing expenses & increase property improvements for higher income is made easily with review of accurate P&L’s. For instance, if you have a much higher turnover cost at one property compared to another, this can help make a strategic decision if improvements are needed to reduce tenant turnover.
- Since real estate provides a key tax reduction strategy, this must be carefully tracked to be fully utilized.
- If you have a utility billback program, this is only as useful as the accounting/tracking/billing that is used.
5. Your reputation is invaluable in Property Management, just like any other business
- Your reputation as an owner is only as good as your property manager. Having quality here will reinforce your desire to have good tenant relationships, and will reflect in longer tenant retention and satisfaction.
6. Leases should extensively Cover hazards like Mold, bed bugs, etc and what responsibility the tenant has in them.
- Experience is the best teacher, they say. And for the PM who has seen it all, this will be covered in the lease. Having Covid -19 clauses in the lease is now par for the course as another added feature of hazards to cover.
What essential questions do you use for your valuable Property Manager? We welcome your feedback on the foundations that have led to your investing success.
