Tips for Choosing a Property Management Company

Me and Jesus....well...not really...at Compassion International in Colorado Springs

Greetings from Santa Barbra, CA….. rainy and gloomy….but the hope for sun tomorrow.

Anyway….

Here in CA to rub shoulders with the folks of Yardi Software and to checkout the sites.  The rain has not stopped me….

Before I arrived in CA….I was in Colorado visiting my mentor Wes Roberts.  So….I have been on a mini-travel marathon of sorts….next?  ….D.C.

Today’s topic is property management.  Specifically, hiring a property management company…..

Over the years, I have learned the hard way about property management.  In reality, good property management is difficult to find.  More specifically, “okay” property management is a gem if you find it.  I know… I know…I may be going a little overboard….but I digress.

So….I was thinking….what makes a good property management company (PM)…for both commercial and residential assets…..and here is my list….very short….but enough to give you some thought….

1) A PM needs to have a solid understanding of the asset being managed.  In other words, does the PM know how to manage a retail shopping center, or a large apartment complex, etc.  You see, just because a PM has managed an apartment before…does not mean he or she knows how to managed a 100 unit apartment or a 500 unit apartment.  Take a look at the portfolio the PM is managing currently and see where the PM’s experience is.  If you want a PM to manage your storage units and the PM’s experience is only in residential homes….you have a big red flag

2) A Good software system.  If your PM is using Microsoft Excel to manage a portfolio….you should run.  MRI, Yardi, etc….are great software programs that offer clients a lot of bells and whistles.  Make sure your PM is using solid systems because…PM reporting, accounting, etc…. is depending on it.

3) Turn-around times a.k.a., “make-ready” time is crucial. PM that are slow at turn-around times when a property goes vacant and the time it takes to get ready for the next tenant is crucial.  Whether you have a waiting list or no list at all….having units available quickly will help your bottom line.  Find out how fast your potential PM is turning things around by asking other clients what the turn-around time is.  If you hear ten business days…then that is too long.  One week is the most I can deal with.  I like to hear three days.  Obviously there are other factors that go into turn-around time…but the shorter the better.

Santa Barbra, CA

4) Communication. Another difficult thing I have learned is if you are having a hard time connecting with the PM….you are probably getting screwed.  No return phone calls…..reports have not shown up……etc.  Especially for long-distance properties.  Talk to the PM’s other clients…ask what the communication is like.  Knowing the communication process and how others perceive it will save you a lot of headaches.

5) Network.  Talk to other owners about which PMs they use.  Ask a ton of questions…how long?  What types of assets do they manage? etc.  I always like to get a perspective from other investors and see who they recommend.  Does it always work?  No…but….it is better to get a short list from people you know vs. starting cold.

Anyway…I could go on and on….and I am sure I will on another post….

Until next time……rob

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