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Choosing a property manager
As a starting point in selecting a property manager a real estate investor should look to its trusted team members - Realtor, Lawyer, Mortgage Broker, etc. - for references to recommend firms. By also contacting the members of the local property management association additional choices can be added to dig deeper in finding the best suited candidate. You will find there will be a big variance from firm to firm on price, services offered, and experience. Be prepared to spend a few hours on due diligence when selecting potential management companies by asking the following questions:
Do you take on properties in the area and of the type I own? Certain firms will only manage single family homes, others only properties greater than 5 units, others only in specific area`s of the city, before wasting your time on anything else find out if the company will even take on the job.
What experience do you have? Ideally aim to hire a property manager that has experience with similar property types for a significant time period ` the more years operating the better! A 4 bed 4 bath house could use slightly different strategies than a property with four bachelor apartments. Experience in your local area is also important as the appropriate rental price to ask, the code compliance requirements, and the best area`s to advertise the property can change from one town to the next.
What certification and training do you have? There are significant requirements that have to be met to operate as a property manager in certain provinces and for other areas there are none at all! An investor should ensure that if your local area has requirements for property management that this is met. You will know that the manager meets a base level of competency and this can also provide you additional protections if anything goes wrong. Membership in property management associations, real estate investment clubs, property management designations, insurance coverage, and educational courses taken, will all increase the likelihood that a high level of service will be provided to you.
How long will it take to receive a response? Can everything be responded to within a few hours? Or will it take a few business days? Will the current tenants receive the same level of responsiveness? What about potential renters? Are there systems in place to deal with urgent maintenance items in a timely manner?
How much will your services cost? There are many ways property management companies charge ` be sure your clear on what the total cost of services will be. Percent of gross rent, flat fee, or a charge per visit to the property are all common billing practices. Some companies will charge an additional fee for each unit rented, others will charge a higher monthly fee but include this service in the cost. Watch out for companies that charge a premium on any work done on the property in addition to the amount billed out by contractors or that make use of a maintenance company that is owned by the property management company ` as these practices have the potential for conflicts of interest.
How much involvement can I have in making decisions about the property? Many property management companies will provide ` and demand! ` the property owner to be hands off from the operations of the property once hired. I recommend that when choosing a company there is clarity on your expectations on when you want to be contacted. Confirm with any companies that they will manage a property where you can maintain a level of control that you are comfortable with. You should set out up to what cost of maintenance work can be done automatically without you being contacted so that everything over a certain amount ($1000 as an example) the management company will get your authorization before proceeding. This will allow for ongoing maintenance to be more automated and for the property owner be able to get more involved when capital improvements are needed. This can also happen in any area where the property owner would like to provide input. Some situations could be:
Prior to approving a potential renter applicant
The cost of, wording, and placement of advertisements
Potential renter and current resident rental incentive programs
Non required upgrades to the property (adding in Dishwasher, AC, upgrading materials for aesthetic not maintenance purposes)
Written by Adam Hoffman, an investor and owner of a Waterloo, Ontario based property management company. If you have any questions about choosing a property manager he can be contacted through his company`s website at www.hoffaco.com
Choosing a property manager
As a starting point in selecting a property manager a real estate investor should look to its trusted team members - Realtor, Lawyer, Mortgage Broker, etc. - for references to recommend firms. By also contacting the members of the local property management association additional choices can be added to dig deeper in finding the best suited candidate. You will find there will be a big variance from firm to firm on price, services offered, and experience. Be prepared to spend a few hours on due diligence when selecting potential management companies by asking the following questions:
Do you take on properties in the area and of the type I own? Certain firms will only manage single family homes, others only properties greater than 5 units, others only in specific area`s of the city, before wasting your time on anything else find out if the company will even take on the job.
What experience do you have? Ideally aim to hire a property manager that has experience with similar property types for a significant time period ` the more years operating the better! A 4 bed 4 bath house could use slightly different strategies than a property with four bachelor apartments. Experience in your local area is also important as the appropriate rental price to ask, the code compliance requirements, and the best area`s to advertise the property can change from one town to the next.
What certification and training do you have? There are significant requirements that have to be met to operate as a property manager in certain provinces and for other areas there are none at all! An investor should ensure that if your local area has requirements for property management that this is met. You will know that the manager meets a base level of competency and this can also provide you additional protections if anything goes wrong. Membership in property management associations, real estate investment clubs, property management designations, insurance coverage, and educational courses taken, will all increase the likelihood that a high level of service will be provided to you.
How long will it take to receive a response? Can everything be responded to within a few hours? Or will it take a few business days? Will the current tenants receive the same level of responsiveness? What about potential renters? Are there systems in place to deal with urgent maintenance items in a timely manner?
How much will your services cost? There are many ways property management companies charge ` be sure your clear on what the total cost of services will be. Percent of gross rent, flat fee, or a charge per visit to the property are all common billing practices. Some companies will charge an additional fee for each unit rented, others will charge a higher monthly fee but include this service in the cost. Watch out for companies that charge a premium on any work done on the property in addition to the amount billed out by contractors or that make use of a maintenance company that is owned by the property management company ` as these practices have the potential for conflicts of interest.
How much involvement can I have in making decisions about the property? Many property management companies will provide ` and demand! ` the property owner to be hands off from the operations of the property once hired. I recommend that when choosing a company there is clarity on your expectations on when you want to be contacted. Confirm with any companies that they will manage a property where you can maintain a level of control that you are comfortable with. You should set out up to what cost of maintenance work can be done automatically without you being contacted so that everything over a certain amount ($1000 as an example) the management company will get your authorization before proceeding. This will allow for ongoing maintenance to be more automated and for the property owner be able to get more involved when capital improvements are needed. This can also happen in any area where the property owner would like to provide input. Some situations could be:
Prior to approving a potential renter applicant
The cost of, wording, and placement of advertisements
Potential renter and current resident rental incentive programs
Non required upgrades to the property (adding in Dishwasher, AC, upgrading materials for aesthetic not maintenance purposes)
Written by Adam Hoffman, an investor and owner of a Waterloo, Ontario based property management company. If you have any questions about choosing a property manager he can be contacted through his company`s website at www.hoffaco.com