Buying an investment property is one of the most popular ways to get supplemental “passive” income. But making sure the property is well-maintained, the tenants looked after, and that you’re maximizing your returns is stressful, to say the least.
Do you have the time for it? Are you up to date on the property laws and codes in the area? These are a few of the questions you’re going to want to have answers for when thinking about managing your investment property.
However, if you want your property expertly managed, with little to no hiccups, hiring a local property manager is going to prove a worthy investment for you. This property is your livelihood; a professional ensures that you’re taking proper steps to oversee its management.
Plus, you wouldn’t want to rent out your property to people that might damage it or are late on their monthly rent all the time. Having to be present at the property is an all-consuming task that a trusted property manager can do efficiently. So how do you find a manager that is perfect for your needs? Read on to find out.
Why Hire a Property Manager?
Hiring a property manager means access to a professional management company that ensures that each manager’s licenses are up to date, their workers are skilled, and they have multiple certifications. Moreover, managers help you screen tenants that might be problematic due to their qualifications, so you’re left with high-quality and dependable tenants most of the time.
If you’re not local, chances are you’re not aware of the property laws of the state and the intricacies of the code/local ordinances of local municipalities. Even as a local, many property owners aren’t quite experts on tenant/landlord laws. Experienced and professional property managers will ensure that the law is being followed, and any issue that arises will be dealt with through the proper legal channels.
In addition, rent collection can be one of the biggest issues a landlord can face. However, a property manager can find firm and useful ways to create a system of rent collection. They can be the enforcer who ensures rent is paid, late fees are collected, and handles any evictions when necessary.
Decide a Selection Criteria
Deciding on selection criteria means thinking of yourself as an employer. This changes your perspective and makes you realize that you are, after all, hiring someone to work for YOU. If you have a basic idea of what you want, jot that down. If you don’t, that’s alright too. There are multiple sources available on the internet to help you find something that works just for you.
A few things to keep in mind as you decide are the price you’re willing to pay, how skilled your property manager ought to be, and the returns you get on your property. A low-cost provider might have standardized their activities across large areas, but they may not be able to help minimize risks specific to a location.
Verify Their Licenses
There are some areas where you might find people managing properties without licenses or updated certifications. A professional property management company or managers will always have their technical expertise backed up by licenses and certificates. These can vary by state and some may also be optional.
Check your state’s real estate commission to verify whether your property manager’s certifications are updated, what types of licenses, if any, they’re required to have, and that their record is clean. A quick background check through current/previous clients can certainly help speed up the process of choosing a competent property manager.
Ask Friends and Colleagues for Referrals
If you’re friends with locals around the area of your investment property, make sure to take their advice into account when selecting a manager. Talking to those you know and trust is a great way to start your journey towards finding a competent professional.
Chances are, property owners and realtors around the area will also know people or companies who have worked for them and tell you who to look for. But go about asking for recommendations strategically. Ask relevant questions about the strengths and weaknesses of the individuals. If they no longer work for them, ask why that is so.
Do proper research, don’t just trust one person’s referral; having a few will give you more of an idea of what company fits your criteria. Be careful with the selection; you’re going to be leaving your property in the hands of this company and/or individuals!
Interview Property Manager Candidates
After you’ve had time to select criteria and have gone through the referrals, it is time to interview a few property managers. Have a chat with the candidates directly to see how well they know the area and the strategies they employ for problems pertaining to an investment property.
Prepare strong questions that encompass all that you want to ask the candidates so that it tests their knowledge of the market and their ability to set you up for success. Questions about their fee structure, the number of properties they manage, or how many years of experience they have in the industry are a good place to start.
Give them instances of problems and see how they will manage them. One of the biggest problems that landlords face is the payment of rent on time. Another is how they screen and select tenants for properties they manage. The interview will give you much-needed clarity on who to choose.
Visit the Properties They Manage
If you liked a candidate after the interview, the next step to your selection process should be visiting other properties they manage if possible. Make sure you’re doing this for the managers you’ve selected AFTER the screening process. Otherwise, this wastes your time unnecessarily.
On-site visits are great to evaluate a property manager. You will see how well-kept the property is, whether there is proper garbage disposal and if the property generally looks maintained. You can also speak to tenants and find out if their complaints are addressed and the time it takes for a repair issue to be resolved.
Just remember, there are a lot of other factors to take into consideration as well when it comes to a property’s condition. How well a property is kept could also be decided by the owner of a property and how much they’re willing to invest in their property. A property manager can only do so much with the funds available to them and with authorization from the owner. Tenants are also not quite a controllable factor as some may take pride in taking care of the property while others may not.
Alternatively, you can also have the property manager visit your property that you’d potentially like to have them manage. You can get a pretty good idea of what their experience is first-hand by asking questions pertaining to your property and seeing what kind of advice they give. It also gives the property manager a good place to start by getting a feel for the layout of the property and its needs if you decide to contract their services.
If you’re looking for someone to look after your investment property so you don’t have to go through the hassle of doing it yourself, especially with limited knowledge, hiring a professional property manager is the way to go. Make sure to do your research and look around for someone that fits your requirements before settling on an individual or a company. The key is to maintain a cordial relationship with your manager, so there is a small communication gap, and they keep you well-informed about everything that goes on at your investment property.
Looking for a property manager in the East Central Wisconsin area? Check out what Manitowoc Property Management has to offer. We’re licensed real estate agents and licensed contractors in the state of Wisconsin and offer a wide variety of real estate and property management services. We’d be happy to refer you to some of our satisfied clients who entrust us with their investments. Send us a message or give us a call today!