The right property manager can dramatically increase your profits and is key to your success. The wrong one can make you wish you never bought property in the first place. Property management companies play a BIG role in any commercial real estate investor’s business plan.
So how do you find the right property manager and what should a property management company focus on to get YOU the most money?
Rental property can be an extremely profitable investment when managed correctly.
The best management comes from an experienced professional property manager. Find the best local property manager before you start shopping, meet them in person and interview them. Once you make a decision, build a good rapport and make sure they have a good reporting system and use industry standard management software. Please do not manage your own properties. You are almost certainly not good at it and property management is NOT the best use of your time as a director of your investment business.
Experience is one of the qualities that define a certified property manager. (CPM)
Candidates for the CPM designation must have a minimum of five years of effective full-time decision-making activity in real estate management prior to earning the designation. Ongoing training is also an important part of the right management balancing act that ensures your manager stays on top of pressing daily tasks AND your long-term business plan for the property.
Great property managers greatly reduce their risks while increasing their profits.
They keep their tenants happy, focus on increasing rents and decreasing vacancies. They take care of maintenance issues right away with no need to get involved in repairs. They stay up to date on the latest changes in landlord-tenant and fair housing laws so you always operate by the rules.
The cost of your property management company is not an area where you want to budget.
You get what you pay for so make sure your dollars are spent wisely. Look for property management companies that contain the following key features and your profits will increase, while simultaneously reducing monthly and annual expenses and maintaining or growing your tenant lists.
A large property management company stays focused on three main areas to maximize return on investment.
1. The Investor – increasing profits
2. Your Clients or Tenants: providing them with a positive experience that results in their continued tenure
3. Other Professional Associates – your support network that ensures operational policies and procedures are followed.
You cannot meet the needs of one of these groups at the expense of another. Ultimately, the right property management company is adept at balancing all the divisions and relationships that contribute to a successful property management and return on investment.
Property management success should be a shared experience within the company.
By this I mean that all employees should exhibit a good attitude, whether they are new to the business or have years of experience. All employees in the management company must be willing to grow and learn. Periodic training through coaching or education must be available to maintain and improve service delivery. All of these efforts translate into increased customer satisfaction and tenant retention.
The right management company will also connect with the immediate community.
Membership of chambers of commerce and various community organizations and must be able to provide you with a minimum of five references for the properties they manage. They must have a strong management track record and portfolio, and have experience working with multiple investors on a single property. They must be strong communicators and willing to work with you and your investment strategy. If your management company treats the property as if it were your property and is spending investors’ money as if it were theirs, you become a valuable resource that contributes to both the tenant experience and the investor’s bottom line.
Property managers must understand how to increase returns within the time frame specified by the owner and know how to add value by improving revenue and reducing expenses. They will carry out due diligence for you and provide you with reports, as well as know how to take over a property after acquisition. The right property manager is also a financial manager and will understand how to analyze financial statements and use performance management technology that provides monthly updated rental listings, income expense reports, as well as annual operating budgets and income forecasts.
Choose a property management company with the proven skills, integrity, reliability, industry knowledge, and management experience needed to increase the value of your commercial real estate assets. Investors own property for a reason: as a financial investment. The RIGHT property manager is the only team member who can enhance your investment by positioning your property for its highest and best use and earning you the most money.
Learn more from a proven investor education resource:
Investor Tours University is a dedicated resource that helps investors build wealth and achieve their defined level of success. We offer state-of-the-art commercial real estate investment education designed to meet the needs of investors with various backgrounds and experience levels. Our faculty consists of a network of national experts in legal, tax, investment strategy, property management, acquisition, and sales professionals who practice what they teach investors, which is how to achieve generational wealth using commercial real estate.