If you are considering hiring a property manager there are a number of considerations. One of the most important is who are the people with whom you are trusting your investment's future success (or failure). As you learn more about the possible candidates, here are a few things to discuss.
Did you know many states do not require any type of licensing to become a property manager? Are you comfortable with that?
Note if the licensing is due to a local business registration requirement or if it involves holding a real estate license? A real estate licensee should follow all local real estate laws. A real estate licensee may also be a Realtor. A property manager who is a Realtor will likely have more structure to their practice. They will understand real estate laws, practice fair housing, and also be committed to a Code of Ethics with a mechanism for consumers to file complaints when it is believed the Realtor did not behave ethically.
Residential property managers have their own industry specific group called the National Association of Residential Property Managers. Members have many educational and network resources. Members also must abide by a NARPM Code of Ethics.
The property manager's business structure will also provide you understanding of who the people are you will deal with. If a real estate license is involved, most states have real estate laws where a licensee is either a salesperson (broker) or the managing broker (who holds the real estate licenses in their office with legal responsibility for the activities of their salespeople).
Does experience matter? That is a decision each owner needs to decide. Would you prefer experienced property management where systems are developed and processes are in place for how your property will be managed? Or does it appeal to you to work with somebody who is inexperienced but eager to learn? With inexperience the owner should expect a much higher touch relationship until the manager proves themselves. The owner may be able to ask for more accommodations to their needs with inexperience. Possibly that will appeal to you?
There is no correct answer. Knowing the company structure will give some guidance as to what a person or team may be able to manage. Generally, one manager, functioning by themselves to capacity, will be able to handle in the 100-150 units range. A team with a division of responsibility has a similar capacity so a 6 person team should be able to manage 600-900 units.
Don't hesitate to ask for 2-3 other owners the property manager is working with. Of course, these will likely be fans of the referenced manager so there is little need to confirm their feelings about the manager company. Instead, confirm whether they believe the manager under consideration is representing their practice to you as described above? How long have they used the property management services of the company? Use the answers obtained regarding people to confirm the practice of the property management entity under consideration.
Property management is a service business. Any service business is a people business. Even mobile phone applications need people in support and development. Your rentals will demand much more people interaction than an app. Make sure you are comfortable with the answers to the people questions.
Ready to rent your home or property? Let's schedule a time to talk. The experts at WILMOTH Group have more than 25 years of experience in property management in the Indianapolis area.
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