Before you sign a management agreement, make sure your property management company excels in these five areas
Making money in real estate involves mitigating risk and eliminating uncertainty whenever possible. While some investors choose self management, others rely on property management companies to ensure their success. But what separates a good property management company from a top-tier one? After participating in over 100 property management meetings, I’ve learned that a strategic, proactive approach yields the best results – and identified five important areas worth evaluating.
An exceptional property management team:
- Prioritizes personalized service. Building strong relationships with both investors and residents underlies successful property management and tenant retention. Experienced property managers (PMs) go beyond knowing their clients’ names; they understand their preferences, concerns, and needs on a personal level. This includes communication style, risk tolerance, and the level of involvement investors wish to have in decision-making.
- Communicates clearly, concisely, and responsively. Effective communication is crucial, and investors have a right to know what’s happening with their property. For example: Are there high-priced maintenance items needing attention? Is the lease coming up for renewal, and if so, will the team be requesting a rent increase? If not, why? Does the resident have a history of paying rent late? Clear, concise, and responsive communication is respectful and essential for resident satisfaction as well. PMs should anticipate resident needs, address concerns promptly (both emergencies and inconveniences), and share vital information that impacts them, such as maintenance schedules, policy changes, and what to do in the event of inclement weather. Being proactive and transparent tells people they matter. It builds trust, fosters positive relationships, and increases resident loyalty.
- Thinks like an investor. Staying informed about national trends is important, but local market knowledge is paramount. PMs should be intimately familiar with zip code-specific details, average lease renewal rates, migrations trends, school rankings, new amenities that may affect a home’s value, and more. With this knowledge, a PM becomes a strategic partner. S/he can provide guidance around appropriate rent increases, as well as important investment decisions, such as choosing the opportune time to sell.
- Conducts routine inspections and oversees property turnover. Inspections – both physical and virtual – provide a wealth of information, so ask about type, frequency, associated fees (if any), software/app usage, and data handling. Proactive PMs use regularly scheduled inspections to identify potential problems early. They note red flags and create an action plan with the resident, if necessary, to make sure the home remains in good condition. When a resident submits a work order, it’s handled expeditiously. Top PMs also use inspection data to plan for repairs/upgrades when the resident vacates and get a preliminary quote to return the property to rent-ready condition. They then share this information with the investor and work in coordination with the team that will make the repairs/improvements, which saves both time and money
- Retains good residents: Most investors prefer to keep a good resident than to turn a property and risk economic vacancy. Knowing this, premier property management companies have an objective way of assessing residents against specific criteria. For example, does a resident communicate consistently, pay rent by its due date, and maintain the property as specified in the lease agreement? If yes, the PM will do what s/he can to retain the resident, knowing how financially draining and emotionally taxing a turn can be. Of course, there will be times when the lure of higher rent outweighs the inherent risks of securing a new resident. In such times, lean on an experienced property manager and ask for guidance to ensure a successful outcome.
Property management goes beyond advertising and lease agreements. The entire staff at Meridian Property Management works hard to balance the needs of both investors and residents, respond in a timely manner, and deliver outstanding customer service. It has highly skilled teams dedicated to leasing, maintenance, and turning over properties efficiently. For its single-family rental portfolio, it consistently achieves over 99.5% rent collection; it boasts a renewal rate of 75%-80%; and its average tenancy is almost 3.5 years and climbing. When seeking property management services, prioritize finding a proactive, strategic team that excels in these key areas to set yourself on the path to success.