Ideally, owners of rental properties would hire property managers that are up to their standards and can completely trust. Even so, it’s a good idea to monitor and regularly check up on how things are going with your property manager or property management company. Things might be going well, but perhaps with a little more supervision, they might be even better.
What do you think is best for you as a property owner? Would you rather have a single tenant per year or do you want to have a new tenant every few months? It’s better to keep one tenant for a long time. A high turnover of tenants can be quite costly for property owners for a few reasons. The first is that as a tenant moves out, you have to renovate the place to a certain extent in order to attract new tenants to rent it. Repainting parts of the place and cleaning the unit can be costly especially with a very high tenant turnover.
Another problem with a high turnover is that it has to do with leasing issues. Most property managers get a cut with each new lease. Having to pay your manager with every new lease or contract can be a strain on your finances. Check in with your property management company every once in a while in order to find out if your tenants are staying long enough.
We’re not saying that maintenance is bad. On the contrary, properly maintaining the property will keep it attractive. You’ll be able to rent it at a higher cost. Too much maintenance, however, can be a problem. If your property manager is focusing on maintenance too much, they might be doing the work themselves and getting paid for it or they could outsource it to handymen and markup the cost of repairs.
Either way, you’re the one paying. Don’t always assume ill intent from your property manager, especially if they’re doing the repairs themselves or if they aren’t charging extra. They might be under the false assumption that these repairs are a good thing. Unfortunately, unnecessary repairs and maintenance will end up costing you money.
It’s not enough for a property manager to have records of all the expenses and profits from your property. They should also make sure that all of their calculations are accurate, even if everything is being done on a spreadsheet. Take the time to go over these records yourself or take them to an accountant. A simple mistake on a spreadsheet can end up costing you a lot of money. The best option would be to invest in your own accounting system.
Property managers are terrific and they take a load off your shoulders. But mistakes do happen from time to time, either intentionally or unintentionally. Checking up with them every once in a while won’t hurt. On the contrary, it might even improve your business.