While many single family rental owners start with DIY property management, eventually they realize that hiring a professional property manager will not only free up their time and attention, but can also maximize the return on their investment through their expertise.

Selecting a professional property manager can be a confusing and frustrating experience. Everyone you talk to will have their own slant, you’ll be exposed to a lot of information and doing an accurate comparison is difficult because providers all have their own way of doing things and presenting their approach.

Remember when you’re selecting a manager, you’re looking for an organization that will not only manage your property and address any tenant issues, but also they’ll be instrumental in maximizing the total return you gain from your investment property. When interviewing managers, be sure you’re focused on who will best support your overall goals for owning investment properties.

Here are five points to focus on when finding the right manager for your properties:

Look for Managers with an Owner Mindset

There’s a big difference in the mindset between a fee-manager and an owner. Fee managers make money when they collect fees, and owners manage from the perspective of managing for total return. This mindset will color decisions on people that are hired, the cost undertaken, and processes that are implemented. You want to find a professional property manager who has an ownership mindset, who will view their job as investment/owner-focused vs. fee-focused, and take advantage of all levers (income, appreciation and tax benefits) to maximize the total return on investment rental properties.

Buying Power

The professional property manager views every dollar of expense as a dollar lost in profit for the owner, so they will do everything in their power to minimize costs.

Look for a professional property manager who already has relationships with a network of vendors, from maintenance workers, to cleaning staff, to landscapers to swimming pool maintenance. Since they deal in volume, they will have the pull to negotiate the best costs for you so you can get the highest return.

Savings Pass-throughs

A professional property manager has buying power, but the important thing to discover is whether those savings will be passed along to the owner, or pocketed by the manager. This should lead to a discussion on reporting and transparency between the owner and manager.

Reporting and Transparency

Ownership of investment real estate is a complex, opaque world. Too often there’s a “black box” of property management, which could lead to the owner thinking they’re getting a “good deal” on the service scope and pricing offered by the property manager, but, in many cases, actually they’re not. There are also important tax issues in the short and long term that need to be managed. A professional property manager will act in an owner’s best interests, providing any and all information necessary in a transparent manner to communicate the health of the investment property, putting the owner in a knowledgeable position at all times.

Management Philosophy

Property Management is a complex set of tasks and processes. Professional property managers will have documented standards for property marketing, management of properties and tenants, and the owner/manager relationship. They will also have specific philosophies on spending and managing costs.

• Property Marketing: An eye on increased bottom line for owner clients. To that end, they keep up consistent marketing efforts to ensure a steady stream of prospects are available to quickly fill a vacancy.
• Property Management: The desired management philosophy is proactive, “no surprises” management. The property manager should get problems fixed in a timely and efficient manner (which means low stress and few interruptions for the owner). They should also be able to regularly provide proactive insights and education to enable owner to make better decisions and increase investment returns.
• Tenant Management: It’s easy to see the tenant as the “squeaky wheel” that needs the most attention, but the professional property manager sees the owner as the client, not the tenant.
• Owner Relationship: Look for a property manager who believes in clear communication with the owner, and who will provide easy access to comprehensive information relevant to an owner’s interests. A good and experienced property manager should be a straight-shooter and should not sugarcoat bad news to owners.

Fees and Overall Costs

You want to understand how fees and costs are determined and managed, and get complete transparency on what the overall costs are. Costs for managing and maintaining rental properties are managed in the owner’s best interests to maximize profit/investment return. A manager who works to reduce disruption to the owner’s time is highly valuable, and a cost savings in itself.

We’re Here to Help

Finding the right professional property manager is an important decision, and if it’s done well, will make your life easier and increase your bottom line.

We hope that this information helps make an overwhelming task much easier. If you have any questions, Haven Homes is here to help.