What do you look for in a property manager? Friendly personalities who can relate to your tenants? Ruthless enforcer of on-time rent? Knows every contractor in town? Those can all be great qualities, depending on your personal preferences. I like to know we’re not going to accept excuses for late payment, and we’re especially not going to listen to an acceptable excuse more than once. It’s not easy to be strong about requiring that we be paid in return for providing a person a good home, but that’s our expectation.
What about growing the value of the property? That’s a super vague requirement and it comes in many flavors. Get the rents up? Sure, but how? Maybe your new property’s rents are so low that nobody would move if you increased them, but generally you need to provide something they value, maybe nice amenities like a barbecue station, dog park, or covered parking.
How do you know what to provide? Your property manager should know. They need that one quality that is so hard to find – a proactive mindset.
Is your PM someone who is chronically busy with many properties? Doesn’t respond when you ask what you should be investing in? Or are they hitting you up with ideas, telling you your competitors have barbecue pits and tenants love them, and you should too. Do you encourage their ideas, or is your first thought “all you want to do is spend my money”.
I have a property manager who last year told me he had tenants who sometimes want a fully furnished unit. I was skeptical but he explained the rent premiums these units get, and the cost of the furniture. I agreed. I invested $800 in furniture, increased rent by $200 which at a 7% cap rate increased the value of the unit by almost $3,000. It has been a successful offering.
Clearly there is always a limit to what you can invest in, but you are fortunate if your property manager leads your thinking on your property, suggesting things and encouraging your investment. That’s a property manager who is on your side.