Suggestions For Property Management Companies?
If i wanted to hire one where would i look?
My situation is this. If i was able to find a good, low priced(below FMV) house in the USA while living in Canada and having my property manager run the place-without me even looking at it.
1)Is this recommended or is this a recipe for disaster
2)If its a feasible plan...where do I find a good company to run it(them)?
[addsig]
Assuming you looked the property over when you were purchasing it, the challenge will be in finding, training, and managing a property manager. Even if you hire a property management company, you're likely to want them to do things a particular way as regards your property. This is something you'll have to discuss with them. And of course you'll need to manage the managers to make sure that they are doing their job properly. It's also a good idea to visit your properties fairly regularly. At least until you have a very long standing positive relationship with your managers. As for finding them, look through the phone book for the relavant area, but don't just hire any property managers. Ask other investors and apartment owners in the area for their recommendations. You're likely to hear more horror stories than recommendations, but that's very useful info as as well.
Good luck
[addsig]
I did a google search for "property managers [state your location]" and was able to find some, but the yellow pages are probably better.
As well as talking to other landlords, ask for the addresses of some properties they manage, and some references. If they won't give them, there is probably a reason.
And absolutley meet with them first. How well they deal with you as you ask numerous and annoying questions for a month or so before you hire them will tell you a lot about how they will deal with your clients (tenants). I would also suggest making a decision before you are ready to buy.
As for the feasibility, we met the manager we hired, spoke with tenants in a building they manage, called some of their landlords and drove by some of their properties. They were very supportive and professional, and made us feel very confident that they would support our properties properly. If you can find someone like that I don't think it is a problem.
I would also recommend visiting your properties regularly in the beginning, just to be on the safe side.
I may be handing off a property to a mgmt company in a bit, and I've done some thinking about what I'll be looking for.
I would analyze companies from the perspective of "what would I do with this property if I were the management company."
Let me give you an example. A company that get's paid, say 8% of the gross rents collected is motivated to Collect rents. They are NOT motivated to keep costs down, get quality renters that will take care of the place, etc.
I would suggest paying a higher percentage of the NOI rather than the GOI. That way they can increase their income by either lowering the expenses OR increasing the income, but it works out the same. I would give them expectations that you will be holding of them, and make sure they do a good job on capital repairs and improvements so that you don't end up with a shoddy roof that was cheap. Perhaps have an overseer that goes by monthly and takes pictures, will find contractors for any job over, say $3000 and things like that.
Food for thought.
I am probably going to hit a raw nerve here but I work for a property management firm and let me give you my take on this subject.
These firms are a business, they deal in many units (100's). It is very difficult to provide the individual attention that most investors and owners expect. Some firms are much more responsive to the property needs than others but do not expect your property to be handled any differently than a hundred others unless you place several properties with them. Also these firms seem to find a niche in the market, low, medium, and high value properties. I do not believe the firms specializing in the higher value properties are nearly as price conscious as those dealing in low value (easier to find repair $$). If you can find a firm that does not have to call the contractor for every repair, it will make a lot of difference. If the plumber gets called for every toilet flapper valve or the electrician to change the electric outlet, most of us cannot afford to have that management firm handling the property.
Also I will mention tenant screening. There are a lot of screening systems out there and if they use a 'one size fit's all' attitude, you are going to have trouble filling vacancies.
Look at the properties they are handling, are they near the same market as yours, are they well maintained, ask the owners what their vacancy rate is, is there good communication with the management firm, how stringent are the screening standards of the management firm.
I hope this helps in finding a good firm. You should expect high quality standards but do not expect a lot of individual attention for your property. You are ultimately responsible. <IMG SRC="images/forum/smilies/icon_biggrin.gif">
[ Edited by egrinch on Date 11/03/2003 ][ Edited by egrinch on Date 11/03/2003 ]
Thanks for the responses!
[addsig]
I think egrinch said it best; in the end it is your property and ultimately you are responsible. I for one really appreciate your candor and your perspective coming from the management firm side of it.
[addsig]