When vacancy rates increase you want to make sure that your units aren’t the ones that are empty. There are two ways to do that; one is to rent high quality units at excellent rates to long term tenants and the other is to keep your property manager on their toes. How do you do that? Here are 5 crucial tips to make sure your property is managed to its best potential.
1. Get your property manager on the same page as you
Before you sign that rental management agreement interview as many property managers as possible. If you belong to a real estate investment group do an impromptu survey to see the good, the bad and the ugly of your group’s property management experiences. Ask property managers for references and call them to hear other property owner’s feelings on the quality of work done. Check at least three long term referrals. Check with your local Real Estate Council to see if any complaints have been lodged against the prospective property managers.
Once you have decided on a property manager, read and add addendums to the management agreement as necessary. If, for example, you have a no dog policy, then write it in (of course sticking to the laws of your area) — get crystal clear on your tenant profile. Write everything in at the beginning so you can eliminate any potential confusion on how you want your suites tenanted.
2. Manage the manager
So, now you have a property manager and its time to retire to the deck, sip margaritas and watch the rent checks roll in — right? WRONG! You are the owner, the property is your business and you are responsible for the results. Keep an eye on your properties and your manager. Drive by every once and a while to make sure your properties are holding the street value — not decreasing it. A wonderful idea is to do a walk through with your property manager and take pictures — this will show the quality of your suites when the contract commenced.
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Be sure to have your property manager do a walk through inspection every six months and take pictures to document condition. This will help keep repairs from getting out of hand.
3. Be Proactive
Is your property manager still only advertising in newspapers? Bring her into the Internet age. Did you know that most people start their new home search online?
Show your property manager how to write ads for your units, and do secret caller calls on your ads. Are you getting a welcome reception, or the cold shoulder? If you use real estate management software you can keep track of repairs done on properties, appliances bought and any other expenses that crop up. This helps you keep in touch with your properties and how your income is being spent.
Nothing says you have to give all your properties to one property manager. If you have two or more properties spread them out so you can reduce your risk and see which property manager is working best for you.
4. Monitor, Make Changes and Adapt
Real estate markets, local laws and advertising mediums all change. Stay current with the trends in your area so that you can help your property manager reach your perfect tenant profile. If you read about lay-offs in your area this is a signal to be proactive and work with your tenants who may be affected. Don’t wait until your tenant moves to fill the vacancy. Have your property manager keep an ongoing dialogue with tenants which will reduce evictions and increase long-term harmony with them. Conversely, if the rental market is tightening and rents are increasing, develop strategies with your property manager to introduce rental increases in a way that your tenants understand and can benefit from as opposed to gouging them. For example if rents are going up 15 percent in your area, you may choose to raise your rents only 10 percent but include a bonus for signing a 1 year lease. Other strategies include improving the suites (paint, carpet, yard care) during an increase. Brainstorm with your property manager to come up with great ideas to make sure your units beat the vacancy norm.
5. Reward Good Work
Everyone deserves a pat on the back for a job well done. Send you property manager a hand written Thank You note and a little something when they have done a great job. It can be for a new tenant, great repairs or even just great reporting. Nobody said property management was an easy job. Give both support and direction where needed.
