Engaging the services of a property management company is very important for property investors who may not have the time for proper attention and/or skill for effective property management of their property investment. Whereas, a property management company is specialised in maintaining and improving the life span of the subject property.
Now, how do we know the right property management company to choose?
Factors to Measure to Evaluate Property Management Services
Considering you already have a property management company, how do you know they are doing a good job of managing and maintaining your property? It is fair to give them time (maybe, few months) to enable you to gather data to check their performance because little or no result is noticed when they start. However, a quality property management company will provide you with data, statistics, reports which will help you to make a valuable decision.
- Turnover rate: Investors had always wish good tenants live on their property forever. Rather, you see both good and bad tenants moving when their leases expire. A good indicator is to consider the average duration of a tenant stays on the properties the company manage. This is very important because your financial forecast is based on turnover. More tenant turnover means higher cost to turn, this is an expense you want to avoid. Some form of mismanagement can be revealed by turnover rate.
- Marketing Success and Effectiveness: proper marketing is key to attracting prospective tenants to occupy your available units. Investors should look out for marketing plans that focus on their target market from the tonne of marketing options available to a property management company. Marketing priorities should be set based on the amount leads and the ROI generated.
- Vacancy length: Vacancy length or void as is professionally called is the period between the expiration of the previous lease and the new lease. This means how long it takes the management company to find a new tenant after the old one has moved out. Investors want short vacancy lengths because it costs money. An important indicator in choosing a property management company is to check the average vacancy length for their properties based on location and demand for such property during the period.
- Tenant satisfaction and feedback: This KPI can also be measured as an investor. Tenant feedback system through tenant survey will give you valuable data to know the tenant’s satisfaction about the services of your/intend property management company. Data to be collected range from manager’s attitude and behaviour, frequency and quality of communication, availability, timeliness, how helpful and more. Proper data analysis should be carried out to determine areas where the company is doing well and where they need to work on. Suggestively, it is good to talk to the company about your findings, to ensure the service rendered to current and a future tenant is efficient and effective.
- Maintenance and repair costs: Though tough to admit, most investors want to avoid repair and maintenance costs. This is because repair and maintenance costs can be a huge expense. Property manager’s connections are one of the privileged property owners enjoy when they hire them. These companies have established relationships with vendors that result in a low cost of repairs and maintenance. It is important to check the property management company’s maintenance and repair documentary to determine the effectiveness of their services.
It is very important to have the right team work with you for successful investment. Because of the huge nature of real estate investment, thorough research should be carried out by an investor on a property management company before they are hired. Few of these is their history and their results.