By Mike Baird
Flipping and holding properties can be one of the most rewarding real estate investments you can make, especially if you want to increase your passive income from now until well past your retirement. Without a good property management company, though, rental real estate is about the most active (not to mention irritating and draining) forms of income you can choose.
Without the right property management firm, you’re going to be looking at 3:00 AM calls from your tenants when they have explosive plumbing emergencies. You’re also not only going to have to handle collecting rent, paying property taxes and all of the bookkeeping and daily tasks that go with being a landlord, but you’re going to have to handle tracking down tenants who are late with rent, as well as evicting tenants who refuse to pay. Then you’ll have to handle everything necessary to get the property ready for new tenants, and you’ll have to find those new tenants, too.
Not a lot of fun, right? To avoid all that, let’s talk about how you can find a great property management company to make your life easier and to help you bring in passive income instead of making a whole career out of a single investment.
Ask Other Rental Property Owners for Their Recommendations
First, go ahead and reach out to other investors in your community, especially those who have a good amount of experience with fix-and-hold properties. Ask them which property management firms they recommend and which ones they would never use. If they don’t mind sharing, ask them how many properties they’ve had managed, who they’ve had manage them and what their experiences have been like.
Do Some Online Research
If you don’t have anyone in your circle of friends, acquaintances and colleagues who can help you with references, or if you want to follow up on some of those references, go online to Angie’s List and/or Yelp. Look up property management firms near you and read the reviews that property owners and tenants have left for them.
At this point, tenant feedback is really just as important as what owners have to say. Basically, you want to find out if the company you choose is going to take care of maintenance and repairs, as well as any other service calls, in a timely and efficient manner. If they don’t, then your tenants aren’t going to have much motivation to stay, and they may even pursue legal action if their property is damaged due to negligence on the part of your property management company.
Look for an Overall Positive (or Negative) Trend in Reviews
As you look, you can expect to see one or two bad reviews in the mix. Don’t worry so much about those unless you start to see a trend. If bad reviews keep coming up, and they keep mentioning the same problems, you should move on to the next company.
Call and Interview Your Prospects
Finally, once you’ve narrowed your search down to a few companies, start calling the ones that are left on your list. Be sure to ask about how many properties they typically manage and how many they are capable of managing regularly. You should also ask about their costs and what benefits come with their fees. Then you’ll be able to narrow your list down to your favorite property management company, and they should be able to take care of your rental real estate investments for you. Then sit back, relax and enjoy your rental income!