According to a 2010 US Census, nearly 35% of homes in America at the time were rentals. This percentage has likely increased in the ensuing years. Zillow reports homeownership is at an all-time 50-year low. This rental-intensive market presents a profitable opportunity for real estate investors.
One of the most stressful aspects of real estate investing is not knowing whether you can turn a profit. Most real estate investments require thousands of dollars upfront, and if you take out a loan, then you have the stress of making your loan payments on time. For many investors, the only way they can make those payments is if they keep tenants in their properties at all times.
If you want to ensure you are making a profitable investment, it’s imperative to do research. You’ll also need to be confident that you are properly managing your properties. If you have a full-time job, then maintaining even one property can seem like a daunting task. Fortunately, you always have the option to hire a company to manage your properties for you.
How do you know you’re partnering with a good property management company? We’ve put together a list of six must-know tips for choosing the best property management company.
1. Get Local Referrals
Take a tour of your community and pinpoint various rental properties that are being well-maintained. Next, contact the owners of those properties and ask which management companies they partner with. You can also contact multiple realtors in the area and ask for referrals. After all, realtors are experts in the real estate industry. They can connect you with management companies that are not only reputable but provide an excellent opportunity to decrease maintenance costs and increase profit margins. If you have any friends or family members who invest in real estate, you can ask them for recommendations, too.
2. Pick a Property Manager That Knows the Area
One of the smartest moves you can make as a real estate investor is to partner with a property management company that is extensively familiar with your local area. This level of familiarity allows the company to have a full understanding of local trends and how to take advantage of them.
For example, it may be apparent that the best way to advertise vacancies in the local area is through specific websites or print media. If you have a property management company that isn’t familiar with your area, though, they may deploy other advertising methods that are ineffective. This can lead to long vacancy cycles, resulting in lower profit levels.
3. Learn About the Property Management Company’s Policies
The next step you can take to find the right Dallas property management company is to get a clear understanding of a company’s policies. Some companies prefer for you to be heavily involved in the management of your properties while others prefer you to stand on the sidelines and let them handle everything. Your preference regarding how involved you want to be will determine which type of company is the right partner for you.
- How does the company respond to emergency calls?
- Do they provide 24/7/365 service? Is the company licensed?
- What types of property inspections do they provide?
- What is the company’s tenant retention rate?
- How does the company perform tenant screenings?
- Does the company offer various maintenance packages?
- What services are included in each maintenance package?
These are all questions you will want to be answered. You may find that according to some companies’ policies that they don’t even provide the types of property management services you require. Some companies offer full-service packages only, and some provide different levels of service you can choose from to better meet your needs.
4. Learn About the Company’s Advertising Methods
In today’s society, one of the most valuable ways to advertise vacant rental properties is on the internet. If a property management company doesn’t offer online advertising, you’ll probably want to continue your search. To get a clear understanding of the company’s advertising policies, ask these questions:
- Where do you advertise?
- How do you advertise?
- What’s the average length of time it takes you to fill a vacancy?
- After securing a tenant, how long does it typically take before the tenant takes residence in the home and starts paying rent?
5. Ask About the Company’s Current Workload
Lastly, you need to determine how big the company is— specifically, how many employees work there and how many current clients do they have on their roster. You don’t want to partner with a company that is overloaded and won’t be able to provide your properties with the attention they deserve.
Are you ready to start increasing your profits on rental properties? If so, it starts with hiring the right property management company. Contact us for a free consultation today. You can also download our free “Guide to Finding the Best Property Management Company” for helpful information you can use to interview property managers in your area.