Last week I wrote an article about the basics of property management. I thought it would be good to expound a little more this week and discuss some of the characteristics I would consider red flags when interviewing property managers. These characteristics in and of themselves do not necessarily indicate that a property manager should be avoided, but should at least cause an investor to take pause.
1.) Bookkeeping and Statements
Most legitimate property managers have dedicated bookkeeping personnel. Property management may not seem very complicated, but I can assure you that many managers fall short in this area. I think that any property manager worth their weight will have a reputable software platform in place and dedicated bookkeeping staff. I’ve found that the property managers who try to “wing it” almost never have accurate accounting for their landlords and rarely provide monthly statements. As an investor, it’s critical that your books be in order …. choosing a property manager that sends timely statements and keeps accurate records is essential to this end.
Many states (including Georgia, where I live), require that a property management company have a licensed broker of record. It’s important to know the law in your state and make sure any property manager that you consider have the property licensing. Truthfully, regardless of what the law states, I would probably want any property manager I work with to have some sort of real estate licensing. Not only from a knowledge standpoint, but from an accountability standpoint. The licensing agency protects the consumer by providing a governing board that ensures licensees operate ethically and within the bounds of the law.
3.) Start-up/no References
I would be very cautious to work with a property manager that is just getting started out and/or has no references …read more