This article was formerly published in the Canadian Real Estate Wealth expert advice forum.
In the first week of the last month of their lease, I was aware that the tenants at one of my properties were not going to renew. I reached out to the property manager to check on the progress of the new tenant search.
To my surprise, I found that the property hadn’t even been posted yet. I took a deep breath and calmly reiterated my expectations of posting advertisements well before a tenant moves out. I also started working quickly on a backup plan, which meant looking for a new property manager. I already had someone else in mind and this incident made the decision a lot easier.
During the past eight years of owing and personally managing many residential properties, I’ve had to hire and fire many property managers. I’ve learned it can be difficult to find a good residential property manager who will take care of my place the way that I can.
Have you heard these common complaints from property managers?
The rental market is softening;
The rental market is saturated;
There hasn’t been a lot of responses in the rental ad; or
The rent is too high or not low enough;
Your rental unit could be brand new, priced under market rent and in a great location and these complaints still come up. Another common problem is that I see dozens of rental ad‘s consisting of five boring lines, a gloomy picture and the property manager wonders why there hasn’t been a lot of responses. If you like control over your properties, it will be hard to hand over the keys. But sometimes you have no choice but to do so because you live too far away from your properties or you have too many to manage on your own.
As part of my lessons learned, I wanted to share the key things to look out for when you decide to interview prospective property managers.
Great with people at the right times
A good property manager will know what certain tenants want. They know all the tenant profiles and they will be proactive in telling you what you can improve in the unit (for safety and cosmetic reasons) that won’t kill your budget, but will make it easier to rent your unit out.
For example, if you are targeting Millennials, the property manager will point out that this demographic wants stainless steel, modern finishes and a nice paint job – so you might want to upgrade your avocado stove unless you want to target the older crowd.
A good property manager will be responsive to your emails and your calls, as well as be diligent in backing up their services when they are on vacation. The last thing you want is to find out a property manager has gone on vacation without a backup. Always ask for their backup’s name and how fast they are committed to respond in your contract agreement.
A good property manager will be proactive in not only marketing your place well in advance, but also knowing how to sell your property during showings. They know what good tenants want and they know how to market your unit’s star features to attract those tenants. They will go beyond the boring ads and sell your place to your target tenants using the latest social marketing tools. When interviewing a prospective property manager, ask for an example posting and what marketing tools they intend to use. Ask where they advertise and have them show you examples.
Excellent Statements and Diligent with numbers
This is hard to get. Intuitively, this should be the easiest aspect, but I haven’t had much luck. You want a property manager that proactively provides you with statements (ideally every month) and scanned receipts in an organized fashion. Ask what system they use to report to clients and what it looks like. An annual statement with zero details of repairs or receipts is not going to get you very far during an audit with CRA. Ask for an example of their statements.