The right Property Manager can dramatically boost your profits and is key to your success. The wrong one can make you wish you never bought a property in the first place. Property Management Companies play a BIG part of any commercial real estate investor's business plan.
So, how do you find the right Property Manager and what should a Property Management Company focus on to make YOU the most money?
Rental property can be an extremely profitable investment when managed correctly.
The best management comes from an experienced professional Property Manager. Find the best local Property Manager before you start buying, meet them in person and interview them. Once you make a choice establish good rapport and make sure they have a good reporting system and use industry standard management software. Please don't manage your own properties. You are almost certainly not good at it and Property Management is NOT the best use of your time as the head of your Investment Business.
Experience is one of the defining qualities of a Certified Property Manager. (CPM)
Candidates for the designation CPM must have a minimum of five years of effective full-time decision making activity in real estate management before earning the designation. Ongoing training is also an important piece of the right management balancing act that makes sure your manager keeps up with both the urgent daily tasks AND your long term business plan for the property.
Great Property Managers greatly reduce your risks at the same time they increase your profits.
They keep your tenants happy, focus on increasing rents and decreasing vacancies. They take care of maintenance issues promptly without you needing to get involved in repairs. They stay up to date on the latest changes in Landlord-Tenant and Fair Housing laws so you always operate in compliance with the rules.
Your Property Management Company cost is not an area where you want to shave the budget.
You get what you pay for so make sure your dollars are spent wisely. Look for Property Management companies that contain the following key traits and your profits will grow, while you simultaneously reduce monthly and annual expenses, and maintain or grow your tenant lists.
A great Property Management Company stays focused on three main areas to maximize return on investment.
1. The Investor - by increasing profits
2. Your Customers or Tenants - by providing a positive experience that results in their continued tenancy
3. Other Professional Associates - their support network that insures operating policy and procedure are adhered to.
You can not serve the needs of one of these groups at the expense of another. Ultimately, the right Property Management Company is adept at balancing all divisions and relationships that contribute to successful management and Return On Investment from a property.
Property Management success should be a shared experience within the company.
By this I mean every employee should exhibit a good attitude whether they are new to the business or have years of experience. Every employee in the management company should be willing to grow and learn. Periodic training through coaching or education should be available to maintain and upgrade service delivery. All these efforts transfer to increased customer satisfaction and tenant retention.
The right management company will also be networking with the immediate community.
Chambers of Commerce membership and various community organizations and should be able to provide a minimum of five references to you from properties they manage. They should have a track record and strong management portfolio, and have experience working with multiple investors on a single property. They should be strong communicators and be willing to work with you and your investment strategy. If your management company treats the property like they own it directly, and are spending investors money like it belongs to them they become a valued resource that contributes to both the tenant experience and the investor's bottom line.
Property managers have to understand how to increase returns within an owner's specified time frame, and know how to add value by enhancing income and cutting expenses. They will conduct due diligence for you and provide you with reports as well as know how to take over a property after acquisition. The right property manager is also a financial manager and will understand how to analyze financial statements and utilize yield management technology that provides monthly updated rent rolls, income expense reports as well as annual operating budgets and income forecasts.
Choose a Property Management Company with proven abilities, integrity, reliability, industry knowledge, and management expertise needed to enhance the value of your commercial real estate assets. Investors own property for one reason - as a financial investment. The RIGHT Property Manager is the one team member that can improve your investment by positioning your property to achieve its highest and best use and make you the most money.
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