How to Find the Best Property Management Company

July 9th, 2019

Whether you’re investing in a turnkey rental property with a property management company already in place or you’re searching for your own property management company, you only want to work with the best. The property management company will essentially be your investment partner. As with all things investment related, you want to ensure that your partners are trustworthy, competent, loyal and responsible. Those are attributes not easy to find with just a casual search. In a recent podcast episode of A Millennial’s Guide to Real Estate Investing, we sat down with one of our favorite property managers, Salvatore Friscia, founder of two very successful property management companies in San Diego. We wanted to find out from a property management company’s perspective how to find the best property management company. Here’s what we discovered:

 

Realize That Your Property Manager is a Key Part of Your Team

 

Newer investors often don’t foresee how much value a good property management company can add.  The very first step in finding the best property management company is to realize that they’re going to play an important role in your investment strategy. Says Salvatore Friscia, “You don’t see a lot of real estate investors acknowledge that a strong property manager’s an integral part of their team.”

 

Don’t Focus on the Cost

 

While it’s natural to ask about the cost of hiring a property management company, it’s not one of the first questions you should ask, advises Salvatore. “You know, the number one question that most people ask, sometimes even before we can say, thank you for calling, is how much do you charge? But the true question, the more valuablequestion would be to ask, what type of valuedo you provide for your services. Forget the cost for a moment because you may not be comparing apples with apples.” It’s true. In San Diego, for example, where Salvatore works, the industry standard for property management companies ranges between 6% and 10%. That’s a wide range. As Salvatore puts it, “If you’re comparing somebody and you want to know if they’re at 6% or 8%, you may not be getting full property management as opposed to just a la carte service. A better question is to ask what value they’re providing for their management fee.”

 

The Number of Managed Properties is a Little Irrelevant

 

One of the most frequently asked questions of property management companies is, how many properties do you manage? While that sounds like a valid question that unearths their level of experience, it’s not a great question, says Salvatore. “The truth is, it’s just not realistic,“ he says. “From my experience, I’ve seen companies that manage 50 properties suck and I’ve seen companies that managed 5,000 properties that suck. It’s not a matter of how many properties you manage that’s gonna make a difference.” According to Salvatore, “A better question is to ask what properties in the immediate area do you have under management? That gives you a better feel for their understanding of your property type and the surroundings.”

 

Older Isn’t Necessarily Better

 

“It used to be a badge of honor to say we’ve been in business 30 or 40 years,” says Salvatore. “So, you know, you hear a lot of people say, well we’ve been doing this for 30 years or 40 years, you know, that may not be the best thing for you. In the last five years we have really changed the industry in terms of automation, technology and social media. These things have really changed the way property management companies are handling assets.” What Salvatore is saying is simply, older isn’t necessarily better when it comes to finding the best property management company. Experience is still critical. But the right kindof experience is more crucial than the amountof experience, since the advent of technology. You want to hire a property management company that is savvy about social media, automation and the entire digital world. Why? Because that’s the world your tenants live in. Also because these are the times when you need automated reporting, online tenant portals and landlord portals. “So you want, in a way, companies that have been around for maybe four or five years that might have the upper hand nowadays on what’s necessary, what they can offer you in terms of their workflow and their systems; that they can offer you to help out property management and communication,” says Salvatore.

 

Choose Someone You’re Comfortable With

 

It’s helpful to spend a certain amount of time with the property manager to see what kind of vibe you get; who you can talk easily with and feel like you could have a good relationship with. Whether it’s a long Skype or a lunch, it’s important to spend some time so you can kind of evaluate the energy. As Salvatore says, “You want to definitely have somebody who you can relate to and understands your goals and what you’re trying to aspire to do.”

 

You Have to Look at Online Reviews

 

Online reviews are a strong indicator of the track record of a property management company. “You’ve got to look at reviews,” says Salvatore. You’ve got to look online. One of the questions I would recommend to ask a property manager is, what’s your online rating? If they don’t know immediately with their online rating is, they’re not paying attention. It’s important for me to put the measures in place as a business owner to make sure that we’re providing the right service that brings in those five star reviews. So if you ask the property manager, what’s your online rating? And they stumble, they don’t have a clue, that’s a red flag. That’s somebody who’s not aware that Google, Yelp, and Facebook have the power over people in their decision making factor.”

 

Ensure They Understand the Importance of Marketing

 

The best property management companies know that marketing is important to your success and their success. For example, it’s the difference between online photos on Zillow taken from a car with the outline of the window in the property photos and professional photos that entice tenants to send in applications without even seeing the place in person. “So going out there and paying, you know, $50 or whatever for a professional photographer to go out there and take eight to ten pictures of that property now puts you above your competition,” says Salvatore. “And that’s the kind of stuff that definitely you’d want to look for.”

 

A good property management company can make a huge difference in the success of your rental property. As you can see, there are a lot of questions you should be asking of any property management company you’re considering. For more tips on how to find the best property management company, and to listen to this entire podcast episode on A Millennial’s Guide to Real Estate Investing, please click here.

 

 

 

 

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