Are you thinking of moving out of your comfort zone and investing in another province or country? Are you going to hire a property management company? If so here are a few things to keep an eye on when working with a property management company.
Communication Communication is the most important aspect when dealing with property management companies.
Are they quick to return your phone calls or emails? If they aren't responsive with you as the property owner, they probably aren't responsive with your tenants, and that can be extremely hazardous to the health of your rental property.
As property owners ourselves, we have found that you have to keep a close eye on your property managers.
I'm sure to many of you that goes without saying, but if you're using a PM company for the first time, you need to do some research into the company you are using and definitely shop around.
Word-of-mouth is great, but if you don't know anybody that can recommend a property management company in your area then you have to go with trial and error.
Effective and timely communication makes life easy and quickly resolves issues.
A communication breakdown is a HUGE issue and can cause all sorts of headaches.
In a scenario like this don't be afraid to fire your existing PM company and seek out a more competent company (you're probably not the only customer they are screwing over!).
Solution: Establish a communication standard from the very beginning with your property management company and make sure it's on paper.
Hold them to that, and if they stray from the agreement at anytime confront them immediately and get them back on track.
If they stick to the agreement it will make life a little easier, but if they continuously break the communication agreement you may want to find a new property management company that is willing to work with you.
Deferred Maintenance It's a wise policy to visit your rental properties once in a while, or have someone you know in the area do a quick drive-by and let you know if things are okay or in disarray.
Home Owner Associations usually let you know right away if your tenants stray from the local bylaws, but if your PM company ignores the enforcement of the bylaws it can cost you money.
In addition, if your PM company chooses to ignore some basic repairs, they will get worse over time and cost you more money down the road.
It's best to kill the monster when it's small.
Also consider your tenants moving out because repairs are not happening.
Now you have to make the repairs in addition to paying a tenant placement fee that many PM companies charge to get a new tenant in your rental property.
Deferred maintenance can hurt, so keep an eye on the property if you can, and make sure your property management company is doing their job.
Solution: Keep an eye on your property.
Whether you occasionally visit the property or have a neighbor check on it, it's a wise policy to catch any issues while they're small and resolve them quickly.
Your tenants will appreciate it and so will your blood pressure! Wasteful Expenses Just because you hired a property management company doesn't mean you abdicate your responsibilities.
If you have experience managing your own property and something needs a quick repair, you can get it done right away with minimal costs.
However when using a PM company they typically make a service call to the local serviceman, hire them for the job, and they make a trip to your house and fix the problem.
What can typically cost 20 bucks by visiting your local home depot can turn into hundreds of dollars with property management companies.
Rule of thumb: service calls are never cheap, just keep in mind that this is the cost of doing business, but be sure to keep an eye on your expenses so they don't get out of control.
Solution: Like the communication agreement, setup a repair agreement so that you can personally approve any and all expenses.
Furthermore, if you happen to know a handy-man in the area that you trust, you can request that he gets the service call for any repairs.