Hiring the right management company is extremely important. In most cases your investment property is the single biggest investment you have made. The wrong management company can cost you thousands of dollars by putting in the wrong tenant or by not hiring the right maintenance company. Even worse, hiring the wrong management company can have you sued by not knowing the law!
Before you talk to someone from the management company, spend a few minutes looking them up on the Internet.
- Do they have a professional website?
Before you call on a property manager, determine if they have a professional website. Image and professionalism matter.
- Do they have any reviews online?
You will be amazed at how many negative reviews property management companies have. .
- How quickly do they respond to your phone call or email?
If the property management company does not respond to you quickly when you are a prospective client, it is a sign that their communication will be awful when you become a client. It is also a sign that they do not communicate well with their residents. Communication in this business is extremely important.
WHAT WILL MY PROPERTY RENT FOR?
Questions to Ask Your Property Manager
Do you belong to any professional organizations or hold any designations? Are you a member of NARPM
This is important because this determines who is running their property management company like a business and who is doing it part-time to make some extra money while they are being a realtor buying and selling homes. You want a professional management company that specializes in property management.
At Empire we are not just licensed real estate agents, we are members of the National Association of Residential Property Managers (NARPM) who have served on the board of directors and we hold the Certified Property Manager designation from IREM. Pete Neubig is the President of the Houston Chapter of NARPM.
NARPM is a great organization that really brings up the standard of the property managers and what they are held accountable for. My co-founder and business partner, Pete Neubig, was the Houston Chapter President for 2015. And he was the winner of the Rocky Maxwell Award. It is a National award given out to people that have made the biggest difference in NARPM.
Do you or have you owned any properties?
Do you want to work with someone who does not know what it is like to be an investor? You want to work with someone who understands investing and has built their company with the investor in mind, not themselves. Most management companies are built by agents not investors.
The owners of Empire Industries have owned apartment complexes and have owned over 50 homes in Texas. Empire was built out of a need, see “Our Story”. Empire was built “By Investors for Investors”.
What are your setup fee’s, are there any other fees?
Some management companies may charge a lower management fee but they charge a setup fee, they upcharge on maintenance, charge for sending you money, going to the house, etc. Make sure you understand all of the charges.
Empire does not charge a setup fee. Empire charges the owner a management fee, leasing fee and lease renewal fee. Empire does not charge for sending money, does not charge for administration fees such as sending letters, going to the property, etc.
Do you have a guarantee?
What is the company guarantee? What happens if they do not live up to the guarantee?
When do you make owner payments and how often?
At Empire we feel that you should get your money right away. We start wire transfers right into your bank account on the 10th, 15th and 20th. So in case there is a late paying tenant we are able to get you your money. The average, they normally do a one-time payment the 15th of the month and for some reason you miss that cut-off date, you’re not going to get your money until next month. We send an owner report with each payment.
Do they have an owner and resident portal?
Technology is very important. Property managers that do not invest in technology have a more difficult time keeping a good account of their records, including payments from tenants and payments to owners, do not respond to owner and tenant questions in a timely fashion, and do not have invoices available for the owner.
Empire Industries has both an owner and resident portal. Payments can be distributed and can be taken in through the portal. All documents are uploaded to the portal. Access to reports and work orders are through the portal and conversation’s with our property management team is made through the portal. Many of our owners don’t live in the state or even the country, so we feel that using technology is important that they should be able to see everything live as we see it.
How transparent are they?
Does the management company show before and after photos on all work orders and make readies? Does the owner have access to the utility bills, work orders, home depot invoices and maintenance invoices?
Do they know their numbers?
Just a few key indicators that any management company should track:How much does a typical work order cost?
How much does a typical make ready cost?
What is their vacancy rate?What is their collection rate?
What is their eviction rate?
What are their average days on the market?
Does your management company truly act like a business and know their numbers or are they a mom and pop shop that fly by the seat of their pants.
How do you advertise my property?
Ask about the marketing strategy and what they do to ensure your home is leased quickly.
At Empire we receive about one thousand phone calls and internet inquiries every month on our vacant units. We lease about thirty to forty homes per month. A lot of people come to us just to lease their properties because they know we are considered experts in what we do. We use every form of marketing technique at our disposal to get your property rented quickly. That’s MLS, Craig’s List, Zillow, Trulia, we use our website which goes up to about fifty-five different websites. So, a lot of people know who we are because of our reputation and because of that we are able to get a lot of inbound calls.
We realize that vacant property is lost money. If the thing is not rented quick and if you don’t have any phone calls you are not going to be able to select the best tenant and you are going to take whomever comes when you have only gotten one phone call in the last thirty, forty-five days. Most companies may use one to two mediums. They may use the MLS, they may use Craig’s List, they may use the free newspaper. We feel that you should be using all forms of leverage in muti-media to get people inbound on your marketing. If you are not doing that you are probably missing out on some potentials.
Are you insured?
Your property management company should have the following insurance:
- Error and Omission Insurance (E&O)
- General Liability Insurance (minimum of $1,000,000 policy)
- Workers Compensation (real important for management companies with on staff maintenance)
Empire Industries carries all three of these insurances.
What Makes You So Different from other property management companies?
People always ask us that and first of all, when it comes to us we are investors just like you. We own properties. My properties are in the property management mix. We basically created a company because we could not find one that we liked as investors. We looked around, we couldn’t find anything so we did the next best thing. We created our own investor minded property management company to fit our needs as investors.
We are a national award winning company, we won Best Marketing in North America by Business Excellence and we were the winner of the Better Business Bureau Business of Distinction for 2015. Currently we are the highest rated and reviewed company on Google in the city of Houston, and we offer the same award-winning service in Fort Worth.
What Are Your Average Days on Market for your vacant homes
You want to know when a property manager has your properties, how long will it take to get a tenant in? Empire, currently our days are eighteen to twenty-five days vacant. We are running about twenty to twenty-five days ahead of the average. Just so you know, every two weeks that your property sits vacant is a 2% annual revenue that is lost on your property and you will never recoup it. So we realize as investors that you want to make sure that you get your property rented because it is not making you any money.
What is the Average Rent Amount for all of the Properties that You Manage?
At Empire, we manage, our average rent is $1553 and the average is $1189. So if you are looking for a property management company, you want to find out do their properties fit the type of properties you have? We have properties that are two, three, four thousand dollars per month and then we have other ones that are a thousand dollars per month. We do not rent anything that is a thousand dollars or below because it is a different business model. We know because we have owned them in the past and they can be quite a lot of work and we just choose not to handle lower end properties.
What is your eviction rate?
Empire has a 1.36 eviction rate currently and we manage over five hundred houses. We have learned that it starts with who you do and do not accept in the property. That is where your problems will start and if you nip that in the bud in the beginning you will have to deal with a lot less headache down the road.
Average make-ready time frame?
Empire’s make-ready time frame is two to three days. So you want to know when my property is getting ready in-between tenants. How long will it take to get the property rent ready; that’s very important to know.
Up charging on maintenance
We do not up charge on maintenance at all. The same volume discount that we have negotiated with all of our vendors you will receive. Our investment homes are getting repaired just like yours are. Like I said I am an investor, my properties are in the mix also so we make it a point not to have maintenance be a profit center for us. But it is a necessary means to run our business. The average, 5 – 10 percent is the average mark-up and they get a kick-back from the vendor. A lot of people have different things working. Again, you may want to talk to them and see what other companies do when you are asking them these questions.
Hiring the right property manager is paramount to your success.
The right property manager will save you time and money. The few dollars per day to hire a professional manager will ensure you do not make a mistake with paperwork or putting in the wrong tenant. They will save you money on maintenance with volume discounts and will save you money on rent by setting the rent correctly and marketing the property efficiently. They will hold more of the security deposit from a resident because of good record keeping, which is more money in the owner’s pocket. They will keep great records to give to your accountant. They can save you money on your insurance. Most importantly, the right property manager will keep you out of the court system.
Good luck in finding the right partner. We hope that you would consider Empire Industries Property Management.