5 Rules of Property Management
Property management is one of the things that can make or break an investment, even if it is a great deal at purchase. The operations of the property are critical to hitting desired returns. There are five major management tasks to ensure operations run smoothly.
An efficient investment comes from having residents pay on time. This begins by screening potential residents thoroughly. Managers must request the following information when considering a resident.
3x income to monthly rent
Rent is $1000, monthly household income must be $3000+
No previous evictions
Previous landlord referrals
Once a resident has been properly screened and placed, it's critical to have consistent property inspections. If there are not consistent inspections, operators and owners run the risk of letting poor behavior destroy a unit or their property. Inspections should be performed every three to six months. Inspections should be accompanied by a full report.
The lease is the most important thing in a rental property. The lease is the property's bible and is referred to in any bad situation. The lease needs to be bulletproof and have all necessary clauses outlining expectations for the resident as well as ramifications if the guidelines are not met. The lease should protect owners and managers by clearly defining roles, responsibilities, and procedures in default.
Firm but Fair
Property management is often very hands-on and in-depth. There are often grey areas in management and situation-specific problems. It's important that managers are firm with residents by making sure rules are upheld, however, at the same time managers must be understanding of resident issues and when there is a problem, fix it. Everyone should be treating others with the same level of kindness as they want to be treated.
Do what you say
As a general rule in life and business, property managers and owners need to do what they say they are going to do. If a manager tells residents they are going to raise rents but fix X, Y, and Z, then do it. If owners and managers publicize that they are going to refurbish the property and add amenities to keep residents happy, then do it. All too often residents are made empty promises and issues follow. It's critical that both parties uphold their word. This creates mutual respect and a great relationship.
Property Management is an ever evolving process, however, these guidelines will help ensure owners and operators keep their assets performing. These guidelines apply to any size property in all classes of multifamily. For more information on property management, please email us or schedule a call.