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Nov 16

Real Estate Management Companies

By PMV NetworkNo Comments

Real estate management companies can offer you the skills and services you need to maximize your investment properties. Real estate management companies are professionals who can market your properties, screen potential tenants, conduct all maintenance repairs and keep your properties running smoothly.

Real Estate Management Companies are not all alike
Some property management companies specialize in certain types of properties. You will want to make sure you hire one that specializes in your type of property. Types of properties include single-family houses, condos, apartment complexes, commercial and Community association properties. Some companies manage all types of properties while other may manage single-family houses up to small apartment complexes only.

Onsite and Offsite Property Management

Most of the time, you will use one of the offsite property management companies to help you maintain the rental of your properties. The offsite real estate management companies can help you determine reasonable rents for the area, as well as screen any potential tenants.

If you own apartment buildings, then you might prefer an onsite real estate manager take care of the rental process for you. An on site manager hired through real estate management companies in your local area can help you maintain your apartment buildings, and keep them occupied to their full limit.

Benefits of Using Real Estate Management Companies
The main benefit of using real estate management companies is that you can save time. Time is especially valuable if you own several properties in a different state, and cannot easily oversee those properties.

Real estate management companies are found throughout the nation, and can often oversee properties that are quite some distance from your local area. Also, using real estate management companies to monitor your properties is useful when you do not have the expertise or the desire to perform these tasks yourself.

You always want to screen your applicants carefully, but without professional knowledge you may have a hard time choosing the right tenants. You know that the wrong tenants can cause a lot of problems, and you may take longer and longer periods of time to find a tenant to fill your vacancy.

This is when you need real estate management companies to step in. Professional real estate management companies know what you need to look for in a tenant, and can fill your vacancies quickly.

Another Perspective
Real estate management companies can also offer their professional opinion when you are considering making a new investment. Bringing a true professional with you to inspect your potential properties can help you by giving you another, more objective and professional opinion.

Real estate management companies are trained to spot any potential problems with new properties, such as when a property needs intensive repairs. Being prepared with your own real estate management professional can help you with all your real estate management needs.

Business Aspects

In addition to knowing which properties make the best investments, real estate management companies also know all of the laws pertaining to real estate in your state. While the law may not seem important when you are just beginning to invest in real estate, all you need is one troublesome tenant to know the law is a vital aspect of renting property.

Real estate management companies are dedicated to helping you receive the cash flow you need from your properties. All of real estate management needs can be met by one of the real estate management companies in your area, from buying real estate to renting your properties.

Sep 13

Make Finding a Property Management Co. Easier on Yourself by Asking the Right Questions, Part 2 of 4

By PMV Network28 Comments

 Property Management ServicesThis is Part 2 of a 4 Part Series where we have outlined important questions to ask a property management company before hiring them.

  • Part 1 Companies Credentials
  • Part 2 Property Management Services
  • Part 3 Property Management Fees
  • Part 4 Tenant Screening Process 

Property management companies come in all sizes, capabilities and expertise. Just because one works for one investor does not necessarily mean they will work for you. Below we have outlined some important questions to ask a company during your initial interview process regarding services they provide. Their answers to these questions will give insight into their business capabilities and can provide you with an understanding of the type of services they offer which are important to you. 

Part 2 – Property Management Services 

Properties they manage – Property management companies are as different as car dealerships are to each other. For example, a Mercedes dealership will have the best inventory and the most knowledge of the latest selection of new Mercedes. You could visit the Toyota dealership in your neighborhood, but chances are you will not find what you are looking for. Of course, they would love your business and will try and talk you into why a Toyota is a better fit for you than a Mercedes. 

Same with a property manager, they are not created equal when it comes down to their property portfolios. You need to ask what types of property they manage and make sure your type of property is one they manage. If you own a single family home, a company that manages mostly large apartment buildings or commercial property would not be a good match. In this case, your best match would be a company that has a minimum 50% or greater of single family homes in their rental pool.

Some companies manage all types of investment properties…single family homes, apartments, commercial and community associations, but chances are they hold a specialty in one or two areas. 

Inspections – A thorough property inspection should never be overlooked by a property management company. A property inspection needs to be conducted upon tenant move-in and at move-out. A property inspection can range from drive-bys, a walk-through or a video inspection. If disagreements arise between tenant and manager as to items missing or damaged, actual documentation from the move-in inspection and pictures of before and after hold validity versus a verbal agreement.

A video inspection of the interior as well as the exterior of property is the best option. Still pictures are good, but sometimes do not capture all areas of property. The video will not only capture all areas, but is easily interpreted and validated as the subject property. A signed checklist at move-in from tenant validates that tenant concurs with the inspection findings. 

Maintenance – When it comes time to performing maintenance or repair work to their rental properties some property management companies have their own in-house maintenance personnel. These are usually employees of the company and are paid a salary through the company. The costs or hourly rate of any maintenance or repair work that is required will be dictated by the management company itself.

On the other hand, the management company may decide to outsource all or some maintenance work to outside vendors. These vendors could range from a handyman, specialized tradesman such as a plumber or a large facility that performs all types of maintenance work.

There are pros and cons to both and I do not advocate one over the other but will outline a few points of interest:

In-house Maintenance

Pros:

- More readily available, since they work within the management company

- Direct communication with management company and their policies

- More intimate with property…they are the “one” contact and know the history of your property 

Cons:

- May be more of a “jack of all trades” versus being specialized in a certain field and having the appropriate licenses

- May not be as determined to perform or finish maintenance work in a timely manner as he/she is not being paid based on the job. Whether he/she finishes in 2 hours or 8 hours, its all the same.

- If in-house maintenance crew is not available, either the repair work waits or the company will need to search for a outside vendor on short notice 

Outsourcing Maintenance

Pros:

- This allows the property management company the luxury of competitive bidding among vendors, which could equate to lower costs

- Vendors will be eager to sign contracts with a property management company that can bring stable business to them, and as a result will most likely perform quality work in a timely manner

- Most vendors will be specialized tradesman carrying all required licenses, insurance and being bonded 

Cons:

- Some property management companies will add a surcharge or mark-up above the actual cost of any repair work to cover their time in acquiring these bids.

- If work was not completed properly, it may be difficult to get the vendor back on the job. 

Another option is coordinating all maintenance work yourself. This may work for you if you have reliable contractors you have work with and are dependable. You can probably save yourself some money but this will involve a bit of your time on your part. 

Accounting – Most full service property management company will offer as a customary service some type of accounting procedure. This usually comes in the form of a monthly paper statement itemizing all income and expenses funneled through the management company on your property for that particular month. It will show rental income and any expenses such as management fees, repair costs, lawn care service, advertising charges, lease renewal fees and possibly utility charges. The monies owed the owner also referred to as the net amount should be clearly spelled out on this statement. The monthly statements are usually mailed every month to the owner along with a deposit check for the net amount. You should also be provided with a end year statement along with a 1099 for tax purposes.

With the advancement of online technology many management companies are now offering their owners the ability to view and print their monthly statements via the companys’ website or online portal. These portals have the ability to store other documents such as the management contract, vendor invoices, pictures of property, inspection reports etc…all at your fingertips.

Another great advantage of working with a savvy property management company is their ability to setup automatic deposit of your monthly checks. No more waiting for the postal service, your deposit checks can be deposited directly into your bank account. Chances are they will also have the ability to setup automatic debit of tenants rent from either a checking account or credit card.

Sep 07

Make Finding a Property Management Company easier on yourself by asking the Right Questions, Part 1 of 4

By PMV Network3 Comments

 This is Part 1 of a 4 Part Series where we have outlined important questions to ask a property management company before hiring them. 

  • Part 1: Company Credentials
  • Part 2: Property Management Services
  • Part 3: Property Management Fees 
  • Part 4: Tenant Screening Process 

Property management companies come in all sizes, capabilities and expertise. Just because one works for one investor doesn’t necessarily mean they will work for you. Below we have outlined some important questions to ask a company during your initial interview process. Their answers to these questions will provide insight into their business capabilities, credentials and areas of expertise, and can provide you with an understanding of the type of services they offer which are important to you. 

Part 1-Credentials


Years in the business – Years in the business can equate to experience and stability within a company. Of course things such as changes in key personnel or senior management can jeopardize this. But generally this is a good indicator of a company with a solid foundation. Chances are they have solid processes and procedures in place to streamline the management of possibly hundreds of properties all at the same time. Make sure these “years in the business” are related to property management and not sales only. Just because they have 30 years running a real estate sale department does not make them an expert in property management or tenant relations. 

Done business under another name – You should do your due diligence and contact the Better Business Bureau or other reliable service such as Dun & Bradstreet to see if the company your interested in has a good track record or any consumer complaints filed against them. The Better Business Bureau assigns grades from A to F with pluses and minuses. A+ is the highest grade and F is the lowest. The grade represents BBB’s degree of confidence that the business is operating in a trustworthy manner and will make a good faith effort to resolve any customer concerns. If the company your interested in has done business under another name you will want to check the track record of this business entity also. 

Property Management Only or Sales also – Some investors will only hire companies that deal strictly in property management when it comes time to managing their rentals. These companies are focused on every aspect of property management since this is all they do, and they will not be influenced in trying to get you to sell and making a sales commission. Other investors may find security in knowing they have a management company that is well verse in sales. A company that offers both sales and property management can be very useful if you plan on buying multiple properties and want to work exclusively with one company for buying and managing all these properties. These companies typically will have a good grasp of the overall market condition whether buying, selling for owner occupied or investment. 

Real Estate or Brokers License – In order to practice business as a property manager some states require they process a Real estate or Broker’s license. To receive a license requires extensive education as well as passing the state’s licensing exam. In order to keep their license current they must also participate in ongoing courses. These courses and license designations cost money and show they have a commitment to their trade. Other states may only require a certificate, which consists of basic classes and passing a class exam. 

Staff personnel – Some management company may employ hundreds of employees, while others may be run by a sole proprietor. What you want to find out here is the ratio between their portfolio of rental properties and managers they employ. In other words, if they manage several hundred properties yet only have two staff managers, they may be overworked and unable to give you the service you expect.

Type of properties you manage – Some property management companies manage all types of properties while others specialize in one type, such as residential. If you have a single-family house that needs managing, a company with 90% of its properties being commercial property may not be a good fit. Typically commercial and community association management is the most profitable for a property management company. And some residential property management company may prefer to manage only multi-unit apartment buildings of a certain size and not manage single family houses at all. 

Associations/Affiliates – They are many local and national associations that are tailored for the property management community. These associations are full of valuable information, and are a great way to network amongst others in their industry. Once a member of these associations you have numerous channels of educational classes and seminars all geared toward enhancing their skills as property managers. Upon completing class requirements many are given professional designations to promote them as a professional in their field. Some popular associations are “National Association of Realtors®” (NAR), “National Association of Residential Property Managers®” (NARPM®), “Institute of Real Estate Management®” (IREM®), “Community Associations Institute” (CAI), “Building Owners and Managers Association” (BOMA) and the “National Apartment Association” (NAA).

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