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Investing in multi-family homes or multiple rental properties in a specific area can create a significant long-term income stream. However, protecting your investment and ensuring that the people who live within those homes continue to pay rent can be complex and time-consuming.
That's where a property manager comes in. According to Landlordology:
"A good property manager handles nearly every detail of running a rental property, from finding tenants to collecting rent...Your property manager can be your best asset and you’ll have more free time and less stress if you have the right manager. "
Managing properties — whether they are single-family home rentals, large apartment buildings or commercial spaces — takes time and expertise.
Before you begin your search, develop a clear picture of the services you'll need the manager to provide. They may include rent collection, marketing vacant properties, repairs, upgrades, managing landscaping and snow removal, handling tenant disputes, dealing with local groups and community associations on issues, and more. As with many business relationships, trust and expertise are the most important factors in finding the right property manager.
Word-of-mouth referrals are, of course, the best source. But you'll want to do your own homework. Experts suggest finding and interviewing several property management companies. Some real estate brokers also serve as property managers. The review process will not only give you options but also educate you about the different services and pricing available to you. Areas you should probe on include:
Daniel Fox, president of Realty Asset Advisors, says "Communication with and accountability to both you (the landlord) and your tenants are essential." He adds, "Accountability is especially important when managing costs, monthly reports, and due diligence when hiring contractors."
Even when you believe you've found the ideal rental property manager, you need a process for evaluating costs and performance. Review financials carefully — from the beginning and throughout the relationship. Have formal weekly or monthly reviews to stay close to and resolve issues. Poll your tenants to evaluate service satisfaction levels.
The right property manager can play a huge role in improving cash flow, keeping vacancy rates low, and making your investment property more appealing to new tenants — protecting and growing your investment for years to come.
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