What to Look For in a Property Management CompanyAug 30, 2021
I personally have observed that many management companies can keep it together, owning up to around 500 doors. A generally competent person could operate that company, they hire somebody to answer phones, they got a maintenance staff, they got some people on the payroll, and they could competently manage up to 500 properties.
You start to notice managers that are more remarkable that can get up to 1,000 or more and not have a drop off in the quality of service.
Then, of course, you've got these nationwide behemoths like Greystar with 1000s and 1000s of units with giant offices in every major Metro. And you know, they're, I think they're publicly traded, they should be right. That's obviously an excellent company that knows how to manage properties.
However, if you're, you know, an entry-level investor, and you're thinking about hiring a property manager, I think it's important to understand how many doors they manage and what staff they have on tap.
We met a property manager recently in Mesa if you remember. It's just him and his dad, they manage about 300 properties. And their philosophy is "we're not getting any bigger". And their clients love them because it's two very competent guys who are well paid.
So when an investor calls and is mad or upset about something, they get the full attention of somebody that is on the ball. And by the time that phone call is over, the investor is happy, they're satisfied, they get it. These guys believe that if they go bigger than that, we're just not going to be able to provide quality service. Right. So we're very selective on what we take. So that's a challenge that in the build for rent space, who's going to be your property manager.
One other thing, because you just said, you know, once they get off the phone with the investor, they've usually come that investor down. Even with a tenant, you want to make sure that whoever your property manager is, how can have good communication with the tenant as well, because that's key in either keeping that tenant, I think it makes it an easier process if you have somebody that will communicate,
And finding a property manager that really cares can be tough. Because if you think about it, why don't people get into property management? Well, it's a tough job. You got people, tenants, a lot of complaints, a lot of negativity, in that care that they want to be had their personality could change a little bit or shift. So if you can find someone that really cares about doing a good job in being efficient in providing value, not only to the investor but also to the tenant. That's huge.
When you fly somewhere, you check your baggage, and you get off the plane, you go down to baggage claim, and all the airlines have those offices down at baggage claim. And that poor agent is sitting back there behind the Southwest counter. That's real estate's version of property managers. Usually, when somebody is coming through the door, it's not to say, "Hey, my property is rented, and it's doing really well. And I'm so happy".
The same goes for tenants. When a tenant calls a property manager, something is wrong. They're not calling to say, "what's your address, I have a Christmas card for you". Something is broken. So it takes a unique person that's willing to absorb that and deal with that day in and day out. I think that's why it's so hard to scale. Oftentimes getting above the ownership of the property management company, those people just simply aren't motivated or not paid enough to be willing to deal with that day in and day out.
It takes a unique personality, in my opinion, someone has thick enough skin to be able to lease it up, rent it up, provide the service, the investors looking for talk to a tenant, how they should be talked to. Sometimes it needs to be a little bit firm, sometimes it needs to be nice and respectful.
But it takes the right personality, which isn't always easy to find, yeah, thick skin, but also someone that cares, and that that really cares about that tenant or the investor.
I think we can all agree that property management is not something we want to get into any time soon. So it is a thankless job, in the sense that they are they're the whipping boy, they're the ones that hear all of the crap. So it is tough, but you want to get someone like Chase that that has thick skin and a backbone. But they can also have that soft part of them.