Most rental owners start out with renting a single family home to produce a small amount of income with the intention of growing from there. But when life gets hectic many find that they simply don't have the time to manage their investment. Family, kids, jobs, and life can get in the way. While it is easy to rationalize saving money by doing it yourself, is it actually saving you money (and time) in the long run?
Many people start out by hiring the first property management company they talk to. But it is important to remember to do you research. Not all property management companies are created equal.
- Are they "legal" to manage rental properties?
In Utah, in order to legally manage someone else's properties the "manager" must have a Utah real estate license or be working under a licensed real estate brokerage.
Always verify that the company you choose is a licensed brokerage in Utah. If they aren't you may want to steer clear of getting into business with them.
- They have a license, now what?
Again, not all companies are created equal. To become a licensed real estate agent in Utah. Someone must complete a 120 hour real estate course, test and become licensed through the Division of Real Estate.
If you look into it further, the 120 hours of real estate classes that an agent takes only has about 3 hours of property management training. This is usually, barely enough to scratch the surface of the laws, regulation and rules that govern property management in Utah, let alone the additional laws that the federal government and individual cities also require.
Looking for a real estate company isn't always enough. You wan to look for one that specializes in Property Management and is active within the industry to keep up on the ever changing laws and regulations.
- What type of real estate is their specialty?
While every residential property has its own unique qualities, most will fall into 3 different categories:
- Single Family
- Small multi-family
- Large multi-family
Each one of these categories comes with its own separate list of 'issues'. Does the management company you choose have experience with multi-family or do they only deal with single family units? Do they know what to do in a large multi-family emergency that is different from how you would handle a single family home? When possible, always go with the specialist!
- What areas are they in?
While big name companies get more "advertising" dollars, do they always understand the area your property is located in? A national company may have the experience with federal laws and regulations, but do they understand the individual city codes? Do they have a grasp on the market in your particular area.
Looking for someone with the geographical experience and understanding can save time and money in the long run.
- Will they give you references?
When you are meeting with different companies, ask for references. Online reviews are great to get a basis, but can you always verify them? A good rule of thumb is to not always trust a star rating without doing a little research into the subject.
Can you talk to some of their current clients? Are they happy with their experience, disbursements and communication? A little research will go a long way.
Finding the right property management company is not an easy endeavor. But putting in a little extra effort can save you stress and headaches later on. Finding the right property manager will help you on the right path to a worry-free investment.