Many people have asked me over the years what the most important aspect of real estate investment is in my view. Everyone assumes that the market’s price, position, and timing are all right. I can tell without a doubt that property management is the single most important piece of the investing puzzle after over 1300 real estate transactions mainly to investors around the world. You may make a price error, choose a risky neighbourhood, or employ a poor contractor and still make a profit in real estate. If you hire the wrong property manager, you might lose your shirt in an instant! Don’t get me wrong: place, price, and rehab are all important factors in real estate investing. You may make a mistake or experience a downturn in a market or community with the right property management company in place, and still get a decent return on your investment through positive cash flow. Long-term, a successful property manager protects your investment. Have a look at myHomeSpot.com.
Obviously, “how do I find a successful property manager” is the next question. Here are some pointers on how to choose a successful management firm. This does not necessarily mean you; your property will be managed by someone else.
Obtain a recommendation. When you invest, there are usually people in your peer group or circle of influence who are investing in the same market as you are or who know someone who is investing in the same market. Inquire about who they currently use, who they previously used, and why they switched. Find out what they like and dislike about their management firm, but most importantly, what they don’t like. The management company can do an excellent job of finding tenants, but they fall short on communication; without communication, you’re doomed! For the investor’s peace of mind, having access to the management company is important. Nothing is more irritating than leaving a message or sending a few emails and hearing crickets in the background. At first, you think they’re swamped and won’t get back to you right away. However, after a while, investors begin to wonder why no one is responding, and fear sets in. Is the occupant still there? Is it true that my money was stolen by the management firm? IS MY HOUSE ON FIRE? In most cases, none of the above is valid, but a good property manager will respond to your inquiry within 24 hours.
Request references from the management firm in which you are considering doing business. I believe you can aim for 5 to 10 references from former clients as well as current clients who have been with the management firm for more than a year. Move on them if they won’t supply you with any previous clients. CALL THE REFERENCES As YOU Get THEM. Ask them the same questions about their favourite and least favourite items.