Painless Property Management

Editor’s note: This post is the first of a two part series. To read more about dealing with maintenance and pets, read the second installment. 

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No property is successful without the right property management. If you’re not careful, even a promising investment can turn into a real headache. Follow these four tips and you’ll rest easy at night, knowing your investments are safe and sound.

Interview the company

Investors, especially out-of-state ones, have to roll up their sleeves and ask the big questions. It’s the only way to know if you’ll be a good match. Ask the property management company about their occupancy rates, turn-around times, fees, etc. Does the company’s operations standards align with your own?

When you conduct your interview, keep an eye out for transparency. Our property management partner, AHI Property Group, based in Birmingham Alabama, posts their monthly reports and year-end statements so clients can see what’s going on behind the scenes. And when maintenance is required, investors see not only what was updated, but also the subtler “why’s” and “how’s,” too. Work orders, affiliated invoices, late fees. All this information is available.

Look for easy web access, too. Out-of-state investors need websites that are easy to navigate, or else the whole process becomes a nightmare. The best sites have tenant and owner portals, where owners can see the progress of each property. Sometimes they’ll even give investors the opportunity to look at the total stats for all their properties as well as individual ones.

Know the average tenant’s economic level

Property management companies lease to tenants of all kinds, from Section 8 housing to executive homes. Each economic bracket comes with different benefits and issues, but if you focus on the middle and upper income brackets, you’ll often face fewer risks.

Anytime you rent a below $800 a month (at least in Alabama markets) you may se more problems. Low rent tenants are more likely to damage the home, vacancy rates are higher, and the application process is much rockier.

Military tenants are great. They’re more likely to be responsible tenants, and even if they don’t pay their rent, wage garnishment is simply in the Armed Forces.

Delve into the screening process

Speaking of reliable tenants, knowing the details behind the screening process is a must. AHI, for example, uses a three-stage process:

  1. Pre-application: This includes a credit pull and brief look at the candidate’s stated income. It aims to weed out any obvious rejects.
  2. In-depth review: AHI examines their criminal backgrounds, employment verifications, eviction records, and past landlord opinions.
  3. Risk assessment profile: This sums up all the information gathered and is given to the owner so they know all the associated risks with the potential tenant. That way, everyone is on the same page.

Your property management company’s system doesn’t have to be identical to this, but it should have some similar attributes. Ensure all the verifications are completed and communicated every time you receive a new tenant.

Ensure the company has good marketing

The better the company’s marketing is, the quicker they’ll get you tenants. Many businesses push out to various real estate websites. They work with local personnel placement and spend a little on print advertisements.

Don’t be afraid to ask them about their marketing strategies when you interview your property management company. It’ll help you get a feel for the business’s reach, and you’ll ultimately feel safer when you become their client.

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