Choosing a Property Manager: Weighing Experience and Resources

An important thing to consider when hiring a property manager to take care of your rental properties is the amount of experience they have and the available resources they will be able to draw upon to take care of your investment.

First off, experience matters. You want someone who is knowledgeable and knows all of the legal requirements for managing properties (and there are more than you might imagine). However, I don't necessarily think that someone who has been doing property management for 20 years is automatically better than someone who has only been doing it for 2 years. Let me explain.

Follow up:

20 years of experience could mean 20 years of bad habits and sloppy practices, just as easily as it could mean 20 years of refining their management system until it runs super smoothly. My point is this: the number alone can't tell you if they are going to do a good job or not. It can tell you that they've been around for a while and will likely be around tomorrow to continue to take care of your properties, but it does not guarantee the best performance.

When considering what kind of resources your property manager can draw upon, I am referring to a few things, but primarily, I mean time. Is property management the focus of their business or is it a side-show to their main occupation of selling real estate? (Remember that property managers are required to hold real estate licenses in most states.) You really want a company that does property management full time, so that all of their resources are devoted to keeping your properties occupied, in good working order with paying tenants. Think of it this way, if you were diagnosed with a brain tumor, and your family doctor told you that he dabbled in brain surgery on the side, would you really want him to be the guy cracking open your cranium and slicing into your gray matter? Probably not.

Time should also be thought of in terms of the total man-hours available. Is your property manager a one-man show – so that when he gets sick or goes out of town, nothing gets done? It's important to know that you are hiring a team of at least two, preferably more, active agents who will be getting stuff done for your properties.

Lastly, resources can be thought of in terms of your manager's business practices. Do they operate with standard systems and checklists to make sure everything gets done right and on time, or do they wing it and run into problems down the road because of possible oversights? Don't be afraid to probe a little bit into your prospective manager's procedures and practices. If they don't appear organized to you – they probably aren't and won't make a good property manager.

To sum it all up: you want to hire a manager with a reasonable amount of experience who is dedicated full-time to property management and who has adequate resources in terms of staff and well ordered systems to manage your properties exceptionally well.

Until my next post,

James