By Robert A. Machado
I got a call the other day from an owner of a single family home who was closing escrow on a new home.
She had been trying to sell the old house, but was getting no offers. In 30 days the new mortgage payment was to start and the prospect of making two mortgage payments plus dealing with the vacant house was going to be difficult. Her new goal was to rent the property for a few years and then try to sell again. This situation is occurring over and over again all over the city, county, state, and nation.
If you need to rent one or more of your homes, how do you go about obtaining professional advice and services? What should you consider as important? As a service to you, I offer tips in locating a single family home manager.
Tip #1: Find a manager reasonably close to your property. If the manager has to drive a long way to get to your rental they will be less likely to rent it quickly or to inspect it. Does it make sense for someone that is a 40 minute drive from your property to manage it? A good rule of thumb is 20 minutes travel time maximum. The less the better. Once exception, if the manager lives close to your property, it may be okay for their office to be in the 40 minute range (they can show it on their way to or from work).
Tip #2: Find a manager that markets themselves reasonably well. If the company you are considering does not sell itself well to you, how good will they be at marketing your vacancy to prospective renters? How does their yellow pages ad look? How do the materials they mail you look? How does the property manager look? How polished is their presentation to you?
Tip #3: Find a manager that answers the phone during working hours. Some have no provisions to handle problems while they are out of the office. What if you need an answer to your pressing question and no one is there to give you an answer?
Tip #4: Find a manager who has an emergency phone response after working hours. How serious is the company about emergencies at your property?
Tip #5: Find a manager who knows how to screen prospective renters. It is my experience that not enough time is spent discussing this between owners and managers. The company should have a written policy that is given to prospects. Do you agree with the policy? Beware if there is no policy! This company could be discriminating without even doing it intentionally. Is the written policy adhered to? How are exceptions made? Does the broker review every rental contract?
Tip #6: Find a manager that is not too busy. The industry rule of thumb is 75 houses managed per employee. A property manager that does their own accounting won’t be showing vacancies when rents are being posted or when reports are being generated. How do they market the vacancies during those times?
Tip #7: Find a manager who has references with properties like yours. A short conversation with them will reveal things like when they get their monthly proceeds, are calls returned promptly, how are the properties maintained, and how cost conscious the manager is.
Tip #8: Find a manager who knows maintenance. Is there a contractor on staff or other knowledgeable maintenance staff? Are they able to give over the phone tips to complaining residents that may save a service call? Do they maintain a list of vendors that is used over and over? This may save you money or cost you money depending on the property manager. How do they insure they get the best price and service?
Tip #9: Don’t over emphasize the management fee. At least compare apples to apples. Make sure you discuss all costs. Management fee, rental fee, advertising costs (if free, exactly what is free and what is not), inspection costs, fees for serving notices, who keeps any late fees collected, extra charges for handling maintenance, and returned check fees. These are all fees that you could be charged for as a part of your agreement with the property management company.
