What should I look for in a multifamily property management company?
If you are looking for a multifamily property manager, chances are you are going to be selective. Many common characteristics that investors look for in a property manager include; experience, familiarity with market trends, and ability to foresee local changes. Other important attributes that you want to look for are cost of management, the property managers ability to problem solve, attainability, and pro-activeness. The perfect property manager will always keep you under budget, be available for you, and keep a close eye on the goings on in and around your property.
If the Property Manager I spoke to only has single family experience, is this acceptable?
Multifamily property management is its own animal- different than managing anything else, such as single family or retail. It takes a special type of personality and candor to effectively manage an investor or a team of investors most important investment- their real estate. Any real estate investor knows the importance of an effective management company with the ability to strategically plan and anticipate the entirety of the property. Not to say it cannot be done, but generally, the company should be well versed in multifamily property management.
How do I go about locating a property manager I might be interested in interviewing?
Some tips for locating the best multifamily property managers are driving around and shopping properties that are the condition that you foresee your property being in. Go inside the office and get a feel for the culture of the company. Are they friendly and welcoming? Are they readily available to answer your questions? Can they easily get in touch with their supervisors; the portfolio manager of the company? Does the particular property you are shopping have good Google reviews? Do they respond to their critics professionally? This should help lead you in the right direction.
Are start-up property management companies’ worth consideration?
Another tip for hiring a property management company is to look for start-ups. This sounds crazy but most start-ups are owned by someone that has many years of experience in the industry. They are hungrier and motivated to succeed. And honestly, many start-ups operate smoother and more efficiently than older companies. They will obviously have to get in the flow, but everyone has to start somewhere. This is a great way to build a strong relationship with your property manager because they know you have entrusted them and they will want to prove you right.
I really like one company, but they are more expensive than another company. What should I do?
The one thing that baffles many property managers is how investors try to just find the cheapest property manager they can find to care for one of their life’s most expensive investments. And I am not just saying that because I am a property manager trying to make more money. At the end of the day, is your property going to be managed OKAY by the cheaper property manager? Sure, but is it the truth is that for experience and knowledge, you might have to pay for it- but it will pay dividends back in return. Experienced property managers know how to make you money and where to save you money. It is worth it in the long run when your property is not only succeeding, but improving over time.
How much does it cost to hire a multifamily property manager?
This depends on the size of the property (number of units). Many companies have various fee structures. The one thing you are going to want to do is hire a property management company based on a percentage of monthly rent. A bonus of doing percentages is it gives the property manager an incentive of keeping up with market rents. If they are getting a flat fee, they will likely not be as concerned if your rents are underpriced (although they should be, not always the case).
There are two different fee structures with percentages
- An example would be 4% of monthly rent for the management fee, plus salary. Salaries would be dependent upon the size of the property. Example: 125 units or less should be 1 part time manager, 126 and more may be 1 full time, and 200 and more would be 1 full time and 1 part time, and 250 units would be 2 full time, etc.
- The second fee structure would be an all-inclusive percentage of monthly rents. Such as 7% or 8% of monthly rents to include the employee salaries. Keep in mind that maintenance is a separate ledger account and a separate expense. Property managers can and will hire maintenance positions within their own company, however the cost of their salary is always separate from the cost of the property managers. So no matter which pricing structure you choose, you will be paying separately for your maintenance staff.
We hope you found this article helpful and if you have more questions, please check out our other blogs at mpmpdx.com.