Saturday, December 12, 2009
What you want to look for in a Property Management Company
Stroudsburg - Property Management can be one of the best investments that you ever make for your income producing property and picking the right property manager is one of the most important tasks that you will have once you purchase your rental property. Real estate is your best investment in the world, so why leave it to someone who isn't experienced or doesn't know how to maximize your return.
When you look for a Manager, you'll want to do your best in understanding what the services are that they have to offer. At NEPA Management we are the best in property management. Whether your investment is a single family home or an apartment complex, we'd like to talk to you.
Management companies generally charge a percentage of the rent that they receive. This is called a management fee. Without rental income, the property management company does not make any money and, therefore, it's in both parties' best interests to always keep the property rented and at (preferably) the highest price that the market is bringing.
Repairs and maintenance are necessary with any investment property, and typically, the property manager would want to take good care of your investment. There are three types of maintenance: preventive, on-going and deferred maintenance.
While maintenance comes in three different forms, you want to make sure that you don't have a lot of deferred maintenance when either you purchase your income producing property or while you own the investment. Deferred maintenance may limit your income and certainly will affect the value of your investment. On-going maintenance will ensure that you are keeping up with your investment. If you intend to hold the investment long term, then you'll want to consider preventive maintenance.
Some companies have their own maintenance crew or others will contract out to third parties. Either way, the cost of those services are typically cost plus some sort of an add-on or administrative fee. Don't be worried about this, because, the property management company will make sure to use insured vendors and they have and know the best purveyors in any given market place.
You'll probably want to set a maximum amount of money that the management company can spend without contacting you. That number is typically the cost of buying and installing a hot water heater or about $750. Whatever that cost is for your area, would usually be the maximum amount of money that a management company can spend without having to call you for authorization.
Monthly reporting is also a very big part of the management company's responsibilities. The management company should send you monthly statements. This income and expense statement should be easy to read and in a format that's accepted by general accounting principles. At NEPA Management, our reports are very user-friendly.
Because (sometimes) tenants do not pay, you should understand how the management company will handle an eviction and what the costs are to evict a tenant. It's important for you to know, because evictions cause vacancy and that is something that neither the management company nor you want. However, always remember there's one thing worse than a vacancy…and that's having a rental with someone who isn't paying still inside your unit.
You should ask the company what their policy is and what their guidelines are before they start an eviction process. It should be aggressive while staying within the limits of the law.
When will the management company send your check to you; the beginning of the month or the end of the month? At NEPA Management Associates, we typically send out money during the third week of the month. This enables you to be assured that the money that was received by the management company is in fact good. All the checks have cleared or the rent, if paid by credit card, has been received and the monies are able to be disbursed. It's always good to stay 1 month ahead with your mortgage payment, so in the event your mortgage payment is on the 1st, you'll never feel like you are behind.
Marketing or advertising for your property is essential and it can be done in a variety of ways. Your property can be advertised through the Multiple Listing Service system, through the real estate company themselves, Craig's List or other websites that get the maximum exposure for your property. But, advertising isn't as important as interviewing perspective tenants and understanding that although people see your unit, qualifying them is really a key responsibility of the management company. You want to make sure that the management company you hire does a (1) residency verification, (2) employment verification and (3) a credit report.
Section 8 is a very good way to rent your investment. At NEPA we pride ourselves in having been approved vendors of Section 8 tenants for the past 21 years.
Well, that's what you need to look for in a Management company, and at NEPA Management Associates you can be assured that all of the questions asked above are easily answered by any of our property managers, administrative assistants or realtors who specialize in renting our homes.
NEPA's website can be visited at www.nepamgmt.com.