Choosing the right property manager can be a difficult decision. It is imperative that you find a manager that is able to meet both your short and long term objectives for the property. Short term objectives are typically considered in relation to income and long term objectives often represent capital value.
We all have heard of the "Slum Lord" that doesn't ever fix anything. This is actually a legitimate style of management, though obviously unpopular with tenants. The idea being to maximize income by lowering expenses. The long term result however is the depreciation of property value due to deferred maintenance and usually lower rents. Resident "bad will" can ultimately fail a project.
The opposite end of the scale increases property value by throwing money at any problem that arises. Though this style of management ca be successful it is capital wasteful. Typically, under this capital appreciation style, items will be replaced instead of repaired. Though tenants typically love a manager that will replace a stove instead of fixing it, property owners generally dislike the lack of cash flow.
Once you decide on the balance that best serves your personal goals the next thing that should be considered is the manager's experience. Like many professions, the more time in the business and in the local market area the better equipped a firm will most likely be to handle your property's operation.
Along with experience, the level of professional education achieved by the management firm you select demonstrates their commitment to the business and willingness to keep abreast the myriad of current issues inherent to the market.
Arguably the two most predominant organizations offering professional and continuing education are the Institute of Real Estate Management (IREM) and the Commercial Investment Real Estate Institute. These organizations offer world class education to real estate professionals and certify their members with professional designations such as Accredited Residential Manager (ARM®), Certified Property Manager (CPM®) and Certified Commercial Investment Member (CCIM®). Managers certified with these designations have taken the extra steps to become the most highly trained brokers in the business and are often best equipped to maximize property returns.
Finally, find a manager that you like personally. The relationship between owner and manager may last for as long as you own the property so choosing someone that you can easily communicate with is important.
Choosing the right property manager to meet your needs is as important as choosing the right property. A little research and time invested up front will positively impact the return on your real estate investment.
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