Owning a rental property is a great way to build a nest egg in today's unstable economy. Unlike bank brokered investments, being a landlord provides a safe and secure investment with a degree of piece of mind because you can look at your house almost anytime you want and rest assured that instances of house theft are extremely rare. Its yours and will be yours until you decide otherwise. Your investment is going nowhere and as sure as inflation exists, your property will appreciate.
The problem with rental property is this; Tenants. Tenants will instinctively have a fundamental philosophical difference from yours and unless you are ready and willing to face their combative dialogue, will inevitably cause you some degree of emotional, financial, or physical grief. Stories of tenant nightmares that are significant enough to cost landlords material amounts of money and emotional stress are passed down from generation to generation and from friend to friend. Surely, you know somebody who was wronged by a rental property tenant.
So what is the answer? A property management firm. A property manager will charge much less than your neighborhood realtor and generally will have a more developed sense of personal interaction due to his or her job description of being able to relate with difficult people.
The rest of this article will address some important issues relating to choosing a property manager.
Rule #1 Be sure that your property management firm is licensed. In today's scene, ponzi schemes, grand larceny, and corporate crime seem to abound. As a property manager who collects money and in most cases hundreds of thousands of dollars, on behalf of private clients - the potential for fraud exists to a large degree. As a licensed property manager, one has to report all rent and bank account activity to a council or professional body, which makes instances of personal greed, fraud, or mismanagement quite unlikely.
Rule #2 Be sure that your property manager has experience. Most property managers are also property owners who learned the technique of dealing with tenants and chose to exploit their skill for profit. This is a very good thing. Ask your property manager how long he or she has been in the business and what factors influenced their decision to join the field. If they have less experience than you do, I would humbly suggest that you hit the road and keep looking.
Rule #3 Tenants can be a handful and a personable landlord can make all the difference, make sure your property manager is a personable and easy to get along with person. Bad tempers and explosive demands are met with hostility from most tenants.
Rule #4 Check for references who will attest to the quality of service from your property manager. This should be from both tenants and landlords. Asking for references is generally a bad idea because the provider of the reference will hand pick those people whom he or she refers, but other options exist. The first suggestion I have is to check with your prospective property manager's website, surely there will be a page with vacant rental listings; randomly pick one of these properties and ask your manager if you can speak with the owner of the property, at which time you can ask if the owner/client is happy with the level of communication and service provided. The other option is to ask to speak to a recent tenant and ask them the same question. The response for these references will speak volumes.
These tips should help you to get an idea as to the level of service that the property manager provides, and ultimately the level of service that you should expect to receive.