In an industry as large as property management, choosing from among numerous management companies can be a challenging task. There are many things to consider when evaluating your current management company or contemplating a change.
The goal of the property management business is simple: provide the highest amount of value with the least amount of expenses. In other words, raise rents as high as possible (income), while reducing costs as much as possible (expenses). Many factors impact these two goals. At Nexus Real Estate Services, we compare countless properties – and their management procedures – for our clients.
Here are a few common issues we’ve observed. Hopefully, they’ll be useful as you evaluate your property management performance in current properties or as you scout new acquisitions.
Is your property management company affordable, but lacking professionalism?
We see this frequently, and by looking at the financials, usually, know what to expect before visiting the property. A few signs that might indicate a lack of professionalism are:
- The management fee is low – not industry standard.
- Vacancies are high or rents are very low for the market.
- Marketing is basic, outdated, or nonexistent.
- When you contact the property, the call goes to voicemail. Even worse, the voicemail isn’t professional.
Noting these signs before seeing the property often indicates that we can bring the value of the property up quickly by changing the management structure and increasing the level of professionalism.
When visiting the site, we look for additional signs:
- The property lacks curb appeal, with many items in disrepair. Keep in mind, this is while the property is being sold!
- Management or maintenance is not in uniform and not helpful. Even worse, staff are outside smoking. Most properties in our market are smoke-free, so this is always a red flag.
- Limited hours. Not servicing customers and clients will lead to a steep decline in property performance.
- Poor or no technology. Leveraging technology is our industry’s largest asset. Old, outdated furniture, phones, or computers offer an opportunity to make immediate improvements.
Is your property management company doing as little as possible – at the owners expense?
- Unit turn time – How quickly are units rent-ready? This is a common observation of both large, well-known property management companies and small, understaffed, inexperienced ones. We’ve seen companies that take fifteen days or more to have a unit rent-ready. There is no reason for any unit that’s been regularly maintained to take more than five days. Two days is an acceptable average turn time. We’ve frequently done complete renovations, including full demo and install, in five days. Time is money – period!
- Compensation – Are caretakers or other residents overcompensated for performing tasks that management or maintenance should be handling? If being paid hourly, caretakers will typically take longer to complete the job. We offer flat rates to encourage performance. Again, time is money.
- Maintenance – How promptly are maintenance issues handled? Are issues taken care of immediately or scheduled out, sometimes up to a week? Nothing ruins retention like poor maintenance.
Is your property management company well-trained and compliant with fair housing and other state or federal laws?
We cannot stress enough the importance of ongoing training and ensuring that Fair Housing laws are followed. We’ve witnessed property managers violating the Fair Housing Act or making incorrect statements during a showing. This potentially puts an owner at risk. Ongoing training and management interaction with new employees are vital to ensuring both compliance and a well-run property.
Typically, when we visit a property, the current management company representatives are unaware of our role. While we’ve witnessed less-than-ideal conditions and procedures, we’ve also observed best practices and met amazing managers. These visits provide valuable insight on many levels.
If your current property management company isn’t performing to your expectations or if you’d like an additional perspective, contact the property management experts at Nexus Real Estate Services.