July 21st, 2014
Let’s look at these two statements:
“Purchasing and renting an apartment block was the best thing I ever did. I went on to buy more rentals, quit my job, and am enjoying a great income that is taking care of my kids’ college, my retirement, and annual vacations to Europe.” –Tom (Pasadena, CA)
“I fell into the investment property trap. I poured all my savings into a duplex that turned out to be a money pit. I struggled to find tenants and ended up paying so much in maintenance, taxes, and vacancy that I hardly made any profit. It was a big waste of time and energy.” – Alex (Glendale, CA)
You will agree that these are completely opposing scenarios. If you have invested in property or are thinking about taking the plunge, then you hope that your experience mirrors the first statement above.
But you know there are risks. Perhaps you’ve already run into a few bumps already. So what can you do to rectify any issues and make sure your property investment turns out to be one of the best decisions you ever made?
The answer lies in savvy property management. As with any good business, it doesn’t matter how amazing the product is if you don’t have a fantastic management and marketing team behind it.
The same goes for your property. If you’re interested in learning about how to solve or arm yourself against investment property woes, then stick around because we have identified 5 common problems that will be avoided or fixed with the right property management company:
When it comes to property management, a huge amount of paperwork is involved: lease agreements, taxes, insurance, maintenance requests, repairs performed, and so on.
If your property manager is unable to show you a detailed record of each and every property transaction (communication, work performed, ingoing and outgoing finances) up to the present date, then you could be faced with serious trouble; you won’t be able to follow a budget effectively nor will you know if or how issues have been dealt with.
The right property management company would never allow this to happen. Anything involving your property or tenants will be recorded as they occur, which means you will never be faced with an unpleasant surprise when you run the numbers.
The property manager that doesn’t prepare reports is sloppy indeed. Without reports, how can you possibly project gains and losses? How can you know how well your investment is doing?
Your property manager should prepare detailed reports both monthly and annually so that you know exactly where your investment stands and how to make any necessary adjustments.
If your property managers fill vacancies as quickly as possible and without carefully assessing the tenant, then you know they are more concerned about getting their rent commission than choosing a good tenant. It hardly needs mentioning that a bad tenant can lead to unpaid rent, evictions (and subsequent/sudden vacancies), property damage, deterring other good tenants, etc.
Experienced property managers will not only screen tenants and check credit scores, but they will also know how to interview potential renters and discover if they are a good match for your property and other tenants. Ultimately, good managers will do anything to avoid leasing your property to a bad tenant, even if it impacts their commission.
Managing tenants takes a lot more know-how than you would expect. Your tenants are your source of income. A property management company that lacks experience in tenant selection and management will seriously hurt your investment.
Not only do you want a property management company who advertises your property well—and well in advance—but you want a management team who treats tenants with respect. The right property management company will never ignore tenant issues and maintenance needs. Nor will they hike up the rent without warning. Your property management knows that the secret to a solid income is maintaining your tenants.
We have said it before and we will say it again: failing to do maintenance is one of the worst things you can do. The property management company who puts off maintenance and repairs will ultimately destroy your investment.
Any investor should require a property management company who follows a maintenance schedule and will perform proper maintenance. They will also address repair requests instantly. They know that putting these things off leads to further property damage, further expense and tenant dissatisfaction.
Why ABC Property Management
ABC Property Management protects your property as if it were our own. We know that ultimately, as you grow, we grow. Our experience has showed us what it takes to be the property management team that you require. This is because we hold ourselves accountable to the growth of our clients’ investments. You can’t get more invested than that!