The life of a real estate investor is about creating a passive income and stream and achieving financial independence. If you are managing your own real estate portfolio, you have just created a job for yourself.
When purchasing an investment property, you should factor in an 8-10% monthly management fee, as well as room for unexpected maintenance. Having a great property manager is a sound investment in achieving your goals and owning your time. Although, hiring a bad property manager, can make things very bad, very fast. To help protect your goals and your investment, avoid these property management red flags:
1. No References
Property Management has traditionally been a referral-based business and the manager should have strong relationships within the local community. They should be able to provide references from tenants, owners, local organizations or vendors.
A property manager’s responsibilities are 24/7. There are problems that will arise at your property on nights, weekends and holidays that will need attention. Make sure your property manager approaches their services this way.
The property manager should be able to convey confidence in the value of his services and be professional. If the manager is not professional with you, they probably will not be with your tenants and vendors.
4. Successful Experience
Rather than having many years of experience, look at the amount of successful experience a property manager has. They should be able to give examples of their processes and how they are going to deliver the services they promised. It is important that they can change rapidly with the rental markets, technology and regulations.
5. Sales Pressure
If a property manager is forcing you into making a quick decision or seems desperate for your business, these are signs of running. A good property manager will give you time to collect references, get quotes from competitors and will work with you to determine if the relationship is a good fit.