Know what you should look for when hiring someone to manage your property
Many people misunderstand the role of the property manager, thinking that it does not extend beyond the collection and remittance of rental receipts and acting as a buffer between the landlord and the tenant. Little do they realize that a good property manager will generate a greater return from their property portfolio and enable a long-term portfolio strategy to be realized.
What should you look for when selecting a professional to manage your property?
Firstly, you need someone experienced in the market. If you find somebody with at least seven years experience, you will have found somebody who has survived the global recession. That should provide an indication that he is in the business for the long term and had the skills to navigate and survive the property slump.
A competent property manager will provide a host of services for you, but the most important is the development of a property portfolio strategy. Your chosen professional must be able to articulate his thoughts after conducting a thorough assessment of your personal situation and property portfolio. He must be able to provide you with a credible strategy and activity plan designed to harness the true potential of your property and provide you with the maximum rate of return.
Not just anybody can formulate a credible and implementable strategy. A true professional will have a strong knowledge base on topics including industry history, current market factors and trends, risk factors, and the likelihood of relevant future events that will affect the performance of your property investment. This knowledge should span global, regional and local landscapes.
“Remember to choose wisely. It is your investment, and you need to ensure it is in good hands, providing you with the returns you expect.”
Forming a strategy is one thing, but being able to bring the strategy to life is quite another. You will require an activity plan which will include details of pricing and marketing, customer relationship management and tenant management. This area of expertise is related to the “topline” or revenue generation and management of the property.
Equally important are the cost management and maintenance supervision of the property. Many times, I have seen excellent “topline” performance being eroded due to poor operational and maintenance cost controls.
Managing your property portfolio will also require proper performance measurement, communications and review schedules, and status reporting and financial statements. You should always seek examples of these elements as transparency and candid performance appraisals are essential for managing your portfolio correctly.
You also need to choose a property manager who you can work with and who has your best interests at heart. Your property manager must be customer centered.
There is no point entering a business relationship that is lacking in mutual trust and respect. You must have confidence in his ability to manage a business, your business, which just so happens to be a property portfolio.
As with all investments, there will be good and challenging times. If you do not respect the manager you have appointed, the relationship will not survive the challenging times and you will need to go through the whole process of finding a replacement.
So, take your time, but invest your time to your benefit. Ask for referrals. Call some existing clients. Seek out success stories. Ask your property manager questions for you to gauge the depth of his knowledge.
Ensure that the organization you are dealing with has the resources to support the manager of your portfolio. In these times of eliminating overheads, individual performance can be inhibited because of lack of organizational support.
Finally, remember, it’s your investment, and you need to ensure it’s in good hands, providing you with the returns you expect with as little hassle as possible.