One of the most simple, and overlooked, ways to increase ROI (return on investment) on rental properties is hiring a quality property manager. A Property Manager will boost ROI by increasing occupancy rates, finding dependable tenants, saving money on maintenance costs, and most importantly – providing peace of mind. If you are looking to improve your rental investment business, it is time to hire a manager or find a new one. Diligence is important: take the time and effort to interview and search for the right person. Here are five important areas to investigate:
Are They Focused on Your Business?
You want a professional manager, someone who commits to his career. You don't want any conflict of interest. By this, I mean – property management is not their side gig. Often, managers are also property investors and real estate agents. You don't want the competition handling your business. The problem with this is that their own homes will always come first. This means that their vacancies fill and yours sit on the back-burner.
The Property Manager is Not Too Busy
This makes sense, but it is easy to overlook. Often these managers have a lot of other good qualities. That is why everyone has hired them! When you interview him, ask how many homes they take care of. You want to find someone without too many, or too few units. The rule of thumb – 30 homes per manager. One way to protect yourself here is to find someone who is part of a company.
They Belong to a Management Group
It is best if they are not independent. What happens to your properties if a truck runs him over? There is too much risk involved in the “one-man band.” Besides, they don't have the same resources as the larger companies: large maintenance crews and advertising budgets.
Large Advertising Network
The manager's most important role is filling vacancies. So, the more advertising portals the better. Figure out these items before hiring:
- How big is the brand? Have you heard the name before?
- Are you listed on all the top sites?
- Do they advertise off-line?
- Another quality more difficult to quantify is “word of mouth” – which is positive it the manager has good interpersonal skills.
The last thing you need is someone who steals from you — a common problem in the industry. It is difficult to know if someone is honest based on an interview. You will have to treat him like your tenants by obtaining a criminal background check, credit score, and references.
Once the system is in place the only thing left to do is find more properties. Do this by leveraging your capital via partnering with a reputable lending company. Preferably a company that specializes in residential “buy and hold” financing.
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