Hiring the right property management company is something critical. It can make the difference between a good and bad investment. We do believe that having a good PMC is more important than having a good property. A good PMC will save you many headaches and can generate you a lot of money in the long run.
Everything you need to know before hiring a Property Management Company
Overall, the real estate industry is a good investment but sometimes it can be a bit hard to navigate through it without help. However, you have to pay attention when choosing your PMC as the services they provide are not all equal and you ought to know everything there is at stake before signing a contract.
One of the things you have to be careful of is companies overcharging on maintenance costs. Charging you for stuff that is not actually broken and just sending you bogus bills, fees etc. for beyond reasonable prices.
It might be hard to protect yourself as sometimes it can get technical when replacing appliances. Therefore, what you want to look for in a PMC is firstly their honesty. What you should do is interview multiple property management managers and while doing so do not just try to negotiate on the rates. This is because the difference will probably be small between them.
However, the costs of one extra maintenance bill or other kind of charge can be drastic. Therefore, you should be looking for exorbitant fees, the amount of money they are going to charge for inspections, repairs etc.
The Selection Process
Bearing this in mind, a good way finding a suitable option is to rely on word of mouth. This is the most trustworthy feedback you will ever find for these kind of organizations, as it comes from real experience and is not influenced by marketing.
However, if you do not know anyone who can give you insights in this field, you should start looking for a PMC yourself. When starting your search, it is always best to check out local companies first. This is because in this industry local knowledge is crucial. Knowing how to attract guests/tenants, keeping good relationships with neighbors and having good contacts with trusted tradesmen etc. is of great importance.
After you have spotted a few local options, start your research online. You should be looking for websites which help you choose the right company or other online tools in your country which may help you make the right choice. You should also be checking the reviews from fellow property owners so you can get an overview of what you can expect. Remember that each review counts and should be examined and taken into account.
The next step is to choose your top 3-5 candidates and schedule interviews with them. From this moment on you should be paying the most attention. Before the interviews try to compare their communication. How quick it is? How effective it is? Are they easily reachable? As this will be most probably the same quality of communication when they have to inform you for future repairs, tenants options etc.
When the time for the interview comes some questions are a must and these are some good examples:
- What are the fees?
- What is their philosophy for property management?
- How do they manage the properties?
- How do they get guests? What makes a good guest? What is their filtering process?
- How do they do check-ins/outs?
- How do they handle damage?
- Is there any kind of mark-up on their maintenance team?
- How do they reduce maintenance, cleaning etc. costs for you?
- What is the average percentage cost of the rent?
- Can they offer a list of their owners for references?
- Do they care about the relationship with neighbours?
After you have interviewed a few organizations, choose a primary one and a second as a back-up plan. Therefore, if the first one does not meet your expectations you can go with your back-up plan.
Why Hire a Property Management Company at all?
After all, it is definitely worth taking the time to find the best possible property management company out there. It doesn’t matter if you want to rent it short-term to tourists or long-term, since their services can turn your property into a rewarding experience and generate a steady income.
However, having said this, property management companies can bring the most value to short-term holiday rentals as they can help optimize the occupancy rate with their local expertise and combination of the data they have collected.
On top of that, they save a lot of your time by doing your check-in/outs, preparation for the next guests, handling questions from the tourists, determining the best rate depending on the season and overall marketing your property in the most effective way.
Which all results in less stress, higher income and more freedom for the property owner. But then again, those results can only be expected if the management company is competent and trustworthy as we discussed earlier.