Making the most of your property management company

New Delhi: If you want to manage a real estate portfolio as conveniently as possible, focusing on passive income generation and scalability, it might benefit you to hire a property management company. Property management companies specialise in assisting landlords and property owners in acquiring, managing, and eventually selling their rental properties.

Your property manager will take care of responsibilities like property marketing, tenant screening, conflict resolution, rent collection, and much more. In exchange, you'll simply need to pay a fixed percentage of your gross monthly rent in most cases.

So how do you take the fullest advantage of your property management company? In other words, how can you make sure this arrangement benefits you, the property owner, as much as possible?

Choosing the right property management company

First, you need to choose the right property management company. Some property management operations are going to be more experienced and capable than others, and some will clearly be a better fit for you and your investment goals.

• Location. This should be obvious, but you'll want to work with someone local. For example, if you’re managing a portfolio in Spring, Texas, you’ll need a Spring property management company. Not only will this position the property manager to jump into action more quickly if necessary, but it also typically indicates regional expertise, which can help you choose new properties more effectively and manage your property portfolio more strategically.

• Services and perks. You'll also need to consider the services and perks available through this property manager. Is this company going to help you with every aspect of property management, or are there some services you'll need to find elsewhere? Are there any special benefits of working with this provider instead of another?

• Team. Next, look at the team. A property management company is only as good as the people running it, so ideally, the team will include plenty of seasoned real estate agents, lawyers, property managers, and other professionals ready to help elevate your portfolio. The more experienced and qualified these people are, the better.

• Availability/resources. Sometimes, good property management companies simply aren't available for the work you need them to do. If they already have a full plate and aren't interested in expanding, they may not be willing to take on your property portfolio, especially if you have multiple properties to manage. Consider availability and resources in your decision.

• Prices/fee structures. In the property management industry, most businesses charge a monthly fee, which is typically fixed as a percentage of the gross monthly income you collect. However, prices for services vary, so you'll need to investigate before making a final decision.

• Communication. Ideally, your property management team will be in frequent communication with you. You need to make sure that you choose a partner who communicates freely and effectively.

Getting the full value

Once you have the right property management partner in place, you can implement these strategies to get the full value from your investment:

• Trust the experts. Experts aren’t perfect, but they certainly have more knowledge and experience than amateurs. If you have a full team of real estate agents, investors, and lawyers advising you to follow a certain strategy, take that advice seriously. Don't ignore the professionals you've hired just because your intuition says something different.

• Ask lots of questions. Similarly, you should milk your property management company for all the information you can. Ask lots of questions so that you can better understand their side of the operation and use that information to become a better real estate investor in your own right.

• Answer questions and provide documents when prompted. Occasionally, your property managers will likely contact you with questions, requests for documents, and other prompts. It's important to respond quickly and diligently to these requests, so your property managers can continue working productively.

• Facilitate good communication. Consistent professional communication can make any arrangement or partnership more effective. Hopefully, you've already selected a partner who excels in communication. But you need to work on your own communication as well; try to be as clear and concise as possible throughout your working relationship.

• Take advantage of reporting. Most property managers will utilize recurring reporting to keep you apprised of the latest developments in your portfolio. For example, you may receive monthly reports breaking down your income and expenses. Review these reports carefully and ask lots of questions to better identify patterns and eventually optimise your portfolio for profitability.

Your property management team can make you a much more effective real estate investor, saving you time and money and preventing most of your would-be headaches. However, it's on you to choose the right partner and get the most value for your money.