Real estate is one of the fastest ways to drastically grow your net worth. When handled correctly, you may even be able to establish multiple streams of passive income.
It’s not always practical to manage your properties on your own, which is why so many real estate owners choose to hire a property management company. There are a handful of factors that you’ll need to keep in mind, however, when looking for who to work with.
How Experienced Are They?
In order to get the best results possible, you want to work with a property management company that has a sufficient level of experience in the industry. More specifically, they should also have plenty of experience in managing homes like yours.
Depending on the region that you live in, there could be a handful of property laws that you need to adhere to at all times. The property management company that you work with should be able to quickly discern whether or not your home is compliant with these regulations.
Otherwise, you run the risk of encountering legal consequences in the future. So, keep this in mind during your search in order to help get the best results possible.
How is Their Reputation?
Brand reputation is a great way to determine whether or not you should hire a particular business for its services. The same can be said about a property management company.
If a quick Google search brings you abundant information about how they are unreliable or inefficient, this is a major red flag that you should never ignore. In contrast, however, a property management company that has overwhelmingly positive feedback is likely worth your time and money.
To gain insight into whether or not you should trust the company you are considering, take a look at their online reviews.
To clarify, though, you should only consider reviews that provide a detailed account of that individual’s experience. A review that only says one or two words is irrelevant, regardless of if the rating is high or low. You should also take reviews from out-of-state with a grain of salt.
You should also be wary of reviews that throw in an unnatural number of buzzwords, or ones that seem overly promotional. There is a chance that reviews like these might have been planted by the company itself in order to artificially boost its own reputation.
Are Their Licenses and Certifications Up-to-Date?
As previously mentioned, there are plenty of real estate laws that you will need to take into consideration. Some of these can be particularly convoluted depending on the type of property that you own.
One of the most significant laws that your property manager should always adhere to is maintaining the appropriate licenses and certifications. Although not every state requires a license in order to manage a property, it’s imperative that you research whether or not your prospective company is following these rules.
Although certifications aren’t a hard requirement, they can serve as a guarantee that your property manager will provide excellent service. For example, there are certifications that are specifically designed to help educate property managers about how to work with small residential properties.
A property management company with numerous certifications will be able to handle your property with little difficulty.
Are They Insured?
Regardless of the licenses or certifications that your property manager has, it’s imperative that they have the appropriate insurance coverage. This provides protection for both you and the property management company itself.
For example, in an accident that results in the injury of a tenant or property management company employee, a large number of complications can arise if they don’t have a sufficient level of insurance coverage.
The types of insurance property managers typically require include:
- Errors and omissions insurance
- Tenant discrimination insurance
- General liability insurance
So, be sure to ask your prospective company about their level of coverage. If they can’t provide proof of coverage or attempt to dodge this question, this is a sign that you should look elsewhere.
More likely than not, working with them will only come with a significant amount of risk.
High-Quality Work Outweighs the Cost
Interestingly, the primary factor that many people consider when choosing a property management company is the overall cost. Put simply, they often look for the company that will take the smallest percentage of their total income.
Unfortunately, you often get what you pay for when it comes to working with a property management professional. Making an attempt to cut as many corners as possible will likely result in you achieving subpar results.
Similarly, you may even encounter some of the complications mentioned above, such as the lack of appropriate licensing or insurance coverage.
While this isn’t to say that you should always choose the most expensive property management company, high-quality results will often outweigh the money that you spend on this type of service. It’s much better to pay a bit more for a reliable property management company than to save marginally more money and work with one that puts you at risk.
The Right Property Management Company is Invaluable
It’s in your best interest to ensure that you make the right decision. The above guide will help you easily find the property management company that is ideal for your situation.
Want to learn more about what we have to offer? Feel free to get in touch with us today and see how we can help.
