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Rental Trends: Choosing a Property Management Company

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This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

Finding and selecting a property management company to manage your most valuable asset(s) is no small feat. The stakes are high — you’re looking for a firm or person you can trust to take care of a very valuable investment, maybe even your own home. And not everyone uses the services of a property manager, so recommendations from family or friends may be hard to come by.

Because of this, some property owners fall into the trap of picking the company that’s been in business the longest, manages the most properties or has the largest number of employees.

Here’s why that by-the-numbers approach is a mistake, along with some advice on what you should be looking for instead.

Longevity doesn’t equal quality.

Plenty of firms boast about how long they’ve been doing business. But professionalism, ethical behavior and responsiveness are all far more important than a long tally of years on the job. Developing the expertise to do the job well takes time, but not decades.

In fact, longtime businesses sometimes get stuck in the rut of doing things the way they always have, rather than innovating to keep up with changing markets and client needs.

A balance of experience and innovation is optimal. You want a company or manager that has learned the ropes but also has fresh ideas. Interviewing the company, looking at the types of properties they manage and checking references should give you a good idea of how well prospective firms know the local market and the job.

An ideal firm has embraced some new ideas and technology, especially property management software that allow owners to check property records online anytime. That transparency will bring priceless peace of mind.

Bigger companies aren’t necessarily better.

Can you think of a retail giant that has generally poor customer service and is an unpleasant place to shop? We thought so. Quality doesn’t necessarily increase with size.

Size may come with some advantages, such as financial stability and buying power with local vendors, but it isn’t just the big guys that offer these. And you and your home may just be an address number to a company managing thousands of properties. With that many clients to juggle, firms can be slower to return phone calls or let service slip in other ways.

Aim for the middle ground instead. Find a company that manages enough properties that they’re market experts but not so many that they’re likely to be spread thin. These medium-sized companies likely have the key perks of their larger counterparts, including in-house maintenance and preferred pricing from vendors, so you’ll get a good deal and fast service on any repair work. They’ll have plenty of clients to support the business but not so many that they can take you for granted, so they’ll work hard to keep clients happy.

The number of employees is less important than the quality of employees.

The company you’re considering has hundreds of employees. But how many are licensed managers? Do they all know the market and landlord-tenant laws in your area? Whether you’re thinking of hiring a firm like this, a boutique firm with one or two employees, or something in between, the managers’ qualifications and skills are paramount.

Learn about company practices and employee qualifications. Make sure any managers are licensed and keep their skills fresh. Beyond that, ask the company what other qualities they look for in managers. A professional manner, organization, responsiveness, and excellent customer service should top the list.

How the company assigns managers is also important. Some give owners a dedicated manager, so they have a single, familiar point of contact. At other companies, all managers work with all clients. Companies with both dedicated managers and a team approach offer the best of both worlds. Owners get the benefit of personalized service and the expertise of the entire team.

Looking beyond the numbers when picking a property manager may require a little more homework. But when you can relax, knowing your property is in good hands, you’ll be glad you took a more thorough approach to choosing a property manager. To help you get started, we have a free ebook you can download on the benefits of hiring a property management company and interview questions to ask.

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