Starting a business is tough, and real estate is no exception. To make it past the first year is an accomplishment. If you’re a property owner, handling growth and managing properties effectively is crucial. Proper vetting ensures your property manager can handle your needs and contribute to your business’s success. This blog will walk you through how to vet a property manager, ensuring your investments are in good hands.

Why Property Management Matters

Property management can make or break your real estate investment. Many people get into real estate to gain more time and freedom, but they end up managing properties themselves, which defeats the purpose. Our experience shows that those with the most negative stories about rental properties usually managed them themselves. Here’s a real-life example to illustrate why having a good property manager is crucial.

 

A Real-Life Example

Recently, I met with a husband and wife who managed their rental properties themselves. They handled everything from collecting rent to coordinating repairs. They were in the middle of a 1031 exchange, a process that allows you to defer paying capital gains taxes on an investment property when it is sold, as long as another similar property is purchased with the profit gained by the sale of the first property.

At the start of our meeting, they both expressed how tired they were of self-managing their properties. The idea of hiring a property manager was a relief for them. However, as we progressed in selecting new properties, they began suggesting properties closer to them that they could manage themselves. I had to remind them several times that they had initially said they didn’t want to manage any more properties.

This example underscores a common issue: the tendency to revert to self-managing, even when it’s not in their best interest. Almost like an addiction. People might have a moment of weakness and think they can handle it, but in reality, they need help to avoid falling back into the same stressful routine.

 

The Risks of Self-Managing

Self-managing rental properties can be risky and time-consuming. Many people try to do it to save money, but it often backfires. Collecting rent, handling repairs, and dealing with tenant issues are just the beginning. This can lead to stress and burnout, especially if you have a full-time job. Additionally, self-managing means you’re on call 24/7 for emergencies, which can disrupt your personal life. Inexperienced landlords might also make costly legal mistakes, such as mishandling security deposits or violating fair housing laws.

 

Vetting a Property Manager

Here are some critical questions to ask when vetting a property manager:

Too few units might indicate they are too young and lack the infrastructure.

Ideally, they should have been in business for more than two years to demonstrate stability.

This helps you understand their expertise and whether they can handle your type of property.

In-house teams often save owners money and ensure better control over repairs.

Good software like AppFolio, Rent Manager, or Buildium indicates they are running an efficient business.

Ensures they have coverage in your property’s location and aren’t stretching themselves too thin.

Understand all the fees involved, including lease-up fees, renewal fees, maintenance overrides, etc.

 

Properly vetting your property manager is crucial for your business’s success. Ask the right questions, understand their systems, and ensure their experience and fee structures align with your needs. This thorough vetting process will save you time, stress, and ensure your properties are well-managed.

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Ocala, Florida

DEMOGRAPHICS
Unemployment Rate: 4%
Recent Job Growth: 3.4%
Median Income: $46,798
Population: 360,000
Population change since 2010: Up 38%

AREA INFORMATION
Median Home Price: $172,000
Vacancy Rate: 5.2%
Average Commute: 25 min
Average Temp: 43-91

www.bestplaces.com
www.citydata.com
Ocala, a small agricultural and manufacturing center, is about halfway between Gainesville to the north and Orlando to the southeast. With its attractive tree-lined streets and Old South–style homes, it more resembles a typical Southern city than a Florida city or beach town. Ocala is the capital of Florida’s thoroughbred industry, and ranching and horse-breeding are popular

Highlights

    • Housing growth in and outside the city is largely driven by retirement and new families looking for somewhere that feels like home. Lots of families find this in Ocala because of the comfortable southern feel. The cost of living is 6% below the national average and interest rates are low.

    • Located in the heart of central Florida, there is easy access to attractions found all around the state. Ocala also houses many attractions of its own, including The Appleton Museum of Art, Fort King National Historic Park, and Silver Springs State Park.

    • Job growth increased by 3.4% in 2016, and continues to do so. There are many employment opportunities in manufacturing, healthcare, and sales. The presence of Lockheed Martin, provides many jobs in the manufacturing of advanced technology.