Read on to find out before getting a management company
When you decide that now is the best time to get into real estate, it is tempting to think about turning your newly acquired property over to the hands of a land and parcel management company. However, it is imperative to get a real estate manager in place before signing any contracts. Why?
A great time to think about hiring a property management company would be you:
A. Have an inventory of rental properties coming up. Need time flexibility with your personnel assignments.
B. Do not have a significant amount of inventory (terraced) properties coming up. You will most likely want to stick with your own internal operations team for rent collection duties. If you have a significant number of properties that need collecting, make sure you select a property management company that has the time and experience necessary to manage the collection in house.
C. Are you interested in turning all of your properties over to one tenant? It is common practice within the property management industry to allow current tenants to move out and hire new tenants on a regular basis. If you are moving quickly into the future, this can mean a jump in your rent collections. This is not a problem if you hire a property management company that already has in-house collections staff. It is important to remember to only consider hiring these individuals when there is significant turnover in your properties.
D. Do you require monthly or bi-monthly billing and invoice management? You will need to budget for property management fees based upon the size and longevity of your lease agreement. You may want to keep all of your bills in the house, but it will be easier to deal with a management company if it has the tools to help you bill clients on a monthly or bi-monthly basis. Some management companies offer their clients the ability to bill via the internet and/or through a mobile phone application.
E. Do you currently employ an in-house billing department? In order to effectively maintain a strong bottom line, you must make sure that you only bill the tenants for the services they have contracted for and only to the extent that they have signed a written tenant lease agreement. A strong property management company will be able to advise you as to whether or not you should retain your own billing department.