By now, you’re aware that the team behind The Grind stresses the importance of excellent property management. A great management team is your best defense in this business. They’re the ones who make sure everything runs smoothly for the entire lifespan of your rental property.
To demonstrate that this isn’t just something we preach, we spoke to a friend of REI Nation who recently moved 1,000 miles from home and is renting for the first time. We’re not operating in their market, so they sought out a duplex property on Zillow. Each quote reflects their renting experience with a not-so-great property manager. It clearly demonstrates why excellent property management is essential to long-term success!
6 Reasons Diligent Property Management Matters
1. First Impressions Set the Stage
Investors benefit the most from low resident turnover. When leases get renewed, you save money and stick with a resident you know. That is inherently less risky than taking on a new one. What you don’t want is for your resident to know that they’re leaving the property ASAP! The impression your property – and its managers – make on your residents sets the tone.
“We had to rent sight unseen apart from pictures provided on the listing. When we arrived, [my husband and I] immediately felt like we’d been cheated. There was no washer and dryer installed though the listing said they were included. The kitchen cabinet hardware was attached only on one side. The towel rack in the bathroom fell apart when you touched it. I think we decided then and there that we weren’t renewing our lease. If something great came along, we might even break it, despite the consequences.”
2. Preserving the Value of Your Investment
Property managers don’t just answer the needs of your residents. They ensure that the equity you’ve built in your property is maintained through diligent upkeep and maintenance!
“Because I work with REI Nation, I know what you’re supposed to see in a good investment property. I’ve just never been a renter until now. I saw immediately that the property was in rough shape. Some things would be easy to fix, but I noticed a weird bulging in the concrete on the front porch that might indicate a foundation problem. Then there were things like an unsafe staircase at the back door. I think at first glance it was fine, but there would need to be a lot of work done if the owner ever wanted to resell.”
3. Details Mean More Than Anyone Realizes
A good property manager never utters the phrase, “no one will notice.” They will know, and that’s enough to do it right. Attention to detail demonstrates not only care for the property and its value but care for the resident experience.
“I can deal with things not being perfect. It’s a rental, not my dream home. But certain issues just said, ‘wow, this guy really doesn’t care about this property.’ Like the half-installed hardware or the messy repaint jobs. And just general grime. When we moved in, I found a petrified dumpling under the cabinets! It felt like [they] were just trying to get someone in as fast as possible with a rushed, half-done job.”
4. A Safe Home Is a Home People Want to Stay In
Safety starts within your property’s walls. Part of this involves using reputable contractors, electricians, and plumbers who do the job right. But that also means the managers notice and remove or repair potential hazards. Not only is it a legal liability, but your residents could get seriously hurt.
“While unpacking, we discovered a live wire in a cabinet. It used to go to a garbage disposal. Someone touched it and we’re fortunate no one was hurt! I have a baby that’s almost crawling! What if she got in there and was electrocuted? When I brought it up to the landlord, he just told me to figure out which breaker switch it was connected to and to turn it off.”
5. Communication Makes Residents Feel Respected
While residents don’t want an overly involved manager, they do want a responsive one. You need a team that swiftly addresses and resolves problems while communicating the next steps to the residents.
“Since we moved in, I’ve been sending issues to the landlord via text. The only issue that’s been addressed is the washer and dryer. So far, they’ve ignored the others we brought up or told us to fix it ourselves. [The landlord] doesn’t seem to realize the severity of some of the problems we’ve encountered.”
6. Stay Competitive!
It’s a tough market right now. Inflation is eating into everyone’s earnings, making them more precious than ever. You might be able to raise rent due to competition and inflation, but you should do your best to make your residents feel they’re getting their money’s worth. When they know they have a good thing, they’ll do whatever they can to stay right where they are – even if something cheaper comes along.
“The market we left was considerably more affordable than the one we’re in now. Right now, we’re paying [more than double] for rent than what our mortgage was: for a smaller house in a lot worse shape. Even accounting for market differences, it still feels like a rip-off.”
The foundation of a successful real estate investment is its property management. It’s one place you can’t afford to cut corners!
Looking to start earning passive income? Connect with one of our Portfolio Advisors today!