How to Find a Quality Out-of-State Property Manager
At MartelTurnkey, all of our properties are turned over to the new owners with property managers (and tenants) in place. However, we pride ourselves on being different from our competitors in that we don’t require new owners to keep the same “inherited” property manager for any length of time after closing. Once you purchase a turnkey rental from MartelTurnkey, you’re free to keep the property manager you have, or find your own out-of-state property manager. If you do prefer to hire your own, we want to make sure you have the best experience possible. Here are some tips for finding a quality out-of-state property manager.
Google Property Managers in the Area
The first thing to do is to search online for property managers (PMs) in the city where your turnkey property is located. They’ll need to be close by because members of their staff or their contractors will need to visit your property on occasion. A simple search like, “property management + [city] is all you need to do to get a long list of PMs in the area. That’s the good news.
The bad news is that all those PMs won’t be available to manage your property. You’ll encounter a variety of issues including:
– They don’t answer their phones (in which case you don’t want to work with them anyway).
– They don’t manage properties in your specific neighborhood (that’s okay – just move on to the next on the list).
– They don’t call you back after they said they would (again, pass on that company).
The problem is, anyone can open up a property management company. There’s no licensing or governing agency like there is with a real estate agent. So you’re going to run into a lot of unprofessional PMs who really have no business calling themselves property managers. But don’t worry. Just keep following the steps here and you’ll eventually find a quality PM.
What Qualities to Look For in a Property Manager
You need to look for a very special set of qualities in any PM you hire. For this, you’ll want to make lots of phone calls and spend some time asking and answering questions. You’ll be asking questions to see if the PM has the qualities you’re looking for. You’ll be answering questions so the PM can see if you’re the type of owner they work with and if the property falls within their niche.
What you want for your turnkey property is a manager that isn’t too big or too small. If you hire a PM that’s too big, they might not spend the time they should on managing your turnkey property. If you hire a company that’s too small, they might not have the resources to manage your property well. Try to find a company that manages between 200 and 800 doors. The representative will be happy to tell you how many doors they manage.
Next, you want to ask if they can provide references. You don’t need a lot—two or three will do. An upstanding property manager won’t have any issue with giving you some references to call. You’ll also want to check the online reputation of the company. Look for testimonials and reviews that are third party, independent, such as Google reviews or Yelp.
What to Ask Potential Property Managers
Once you get past the initial stage of vetting a potential property manager and you’ve narrowed down your choices to two or three different companies, it’s time to get down to the nitty gritty. Here are the questions you need to ask:
How much do you charge?
Property managers typically charge between 8% and 10% of the monthly rent. So if your turnkey property rents out for $800 a month, the PM will charge about $80 a month, more or less. Miscellaneous fees might be added on top of that, which brings you to your next question:
What services are included in your fee?
Some PMs will try to hit you with every single little extra, while others are more “all-inclusive” with their fee structure. If you’re really interested in a company, ask them to email you their rate sheet so you know exactly what you’ll be paying. At MartelTurnkey, we work with PMs that offer all-inclusive deals, but the choice is up to you how you want to do it. Just be aware that the PMs fees directly affect your cash flow.
What other properties do you manage in my neighborhood?
Ideally, you want a PM that has hands-on experience with your exact property type, meaning a single-family rental, duplex, four-plex or whatever. Hopefully, any PM company you’re vetting will already be managing a like property type.
Do you have in-house contractors or do you outsource?
Larger PMs often have dedicated in-house plumbers, electricians, landscapers and so on. However, it’s just as common to find PMs that outsource that kind of work to loyal and trusted contractors. It’s fine either way, but asking this question will give you insight into how the company operates.
What kinds of automation do you have set up?
You want to work with a property management company that’s up to date with the times. This is important—not just for efficiency—but for security. Data security is important, and you want a PM that understands how to keep your data secure as well as your tenants’ data. You also want this because it will make your life that much easier where your turnkey property is concerned. Look for a PM that offers things like tenant and landlord online portals, automatic report generation, automatic rent transfers and deposits and so on.
Finding a quality out-of-state property manager for your turnkey property is definitely not easy. That’s why at MartelTurnkey we have trusted property managers in place on every property we sell. But we also understand that some clients might want to hire their own property managers once they take over, which is fine. If that’s what you want to do, these tips will surely make the process go more smoothly for you.