The Proper Care and Feeding of Property Managers, a guide for Realtors
No, I’m not going to get all personal or mushy (or "vocal") like Dr. Laura. In fact, beyond spoofing her book title the rest of this blog is straight from you local property manager.
You may wonder why you’d even worry about properly caring for and feeding your local property manager. I could tell you several reasons but the biggest hook is:
Even though we operate in a small town, we’ve referred 10 (as in ten. You know, more than nine) separate buyers to Realtors just since the kids returned to school in September. Each of these 10 buyers were investors purchasing multiple properties. Just yesterday we referred a cash buyer planning on buying four investment homes.
I’m being completely honest here. Interested? You should be.
The folks that approach us looking to buy are always investors that appreciate that their real, long-term, money will be made by teaming up with a solid property manager.
Pause for a second, then go back and re-read that previous sentence. That's an important point to take away from this blog. You see, serious investors are approaching us FIRST and then we team them up with a Realtor that we know understands the value that we provide.
So, to properly care and feed for your property manager you should:
1. Communicate with your property manager. Consider your property manager as independent, yet still part of your team.
2. Understand that our relationship with the client is longer term than yours. We will interact with this client monthly for potentially many years. This means that our advice given to client is not meant to “close the deal” but rather to ensure long-term profitability for the client. Thus, our advice may not help you today, but it will help you tomorrow- if you listen.
3. Understand that our world operates on a monthly cycle so that the end/beginning of the month are very busy for us. Not the best time to call to try to schedule long meetings with us.
4. Understand that we deal with property maintenance issues that are IMPORTANT for us to resolve even if it means we have less time available for you. Yes, heaters break in the winter, AC breaks in the summer and water heaters break in the middle of the night and, the renters never enjoy the experience. Often, owners don't either because they'd rather not have the expense. In performing our job well, we need to devote time to addressing these issues, even when they occur unexpectedly.
5. Consider that a home can be SOLD in really any condition, even uninhabitable, so long as the buyer agrees to that. However, a home cannot be RENTED in just any condition – it must be habitable and actually MORE than the legal definition of habitable if the client’s interests are to be protected. Thus, our advice to buyers will reflect this reality. This may translate into "walk away" or it may translate into suggest improvements to be made after purchase. Also, if the buyer is to garner top rent for the home, there will likely be suggested improvements that should be made.
6. If you really want your investor/buyer to be successful (as in become a repeat buyer), don’t “guess” on likely rental rates or make promises on rental rates – consult your property manager. I cannot repeat this often enough. "Don't quote rents," you don't know how.
7. If you really want your investor/buyer to be successful (as in become a repeat buyer), keep an honest eye open about the renters that will be marketed to and be realistic about their expectations. In our market, many of today’s renters are yesterday’s owners and their expectations are higher than in times past. Use this as a guide when selecting homes for your client to consider. So, yes dear Realtor, that does mean that the gorgeous and expensive home you are showing is NOT the best rental candidate because it doesn't have a bathtub in the Masterbath. We are actually giving the client good advice that, if you are wise, is also helping YOU to impress the client.
Think about it. Your client makes NO money at all without a renter in place. So, buying an investment property is buying a property that will appeal to the renter (or can be improved to appeal to the renter), while still working within the budget of the buyer.
8. Even though the investor/client may take weeks to make a decision on the purchase, their patience will shorten drastically when escrow closes and they are suddenly responsible for the mortgage on this empty home. The investor/client will want renters FAST to get cash flow going. As a result, when the property manager suggests a potential purchase is not an ideal rental home for such and such reason, LISTEN TO THE ADVICE. We have literally rented homes so quickly that the buyer decided to buy a second home that hadn’t previously been in their plans. Yet they were so impressed with our service and the guidance of their Realtor that they bought again!
9. Respect that our business actually is different than yours. We have a litany of tenant laws, maintenance issues, accounting issues, relationships with both clients and renters, challenged charges against security deposits, etc, that we must navigate smoothly on behalf of the client. Even the application of Fair Housing Laws seem to be stricter (or perhaps challenged more frequently) for property managers than for Realtors. Our business is tough. Respect that fact.
10. Be nice to us. Yes, be nice. Let’s be honest about a little secret. Most Realtors consider property management as “dirty work” that they wouldn’t want to do themselves. As a result, within our overall real estate industry, property managers are often viewed as second-class citizens. Yet, as proven by the 10 investors we’ve referred just since my child started kindergarten a few short months ago – we can be the key to YOU making money. So, be nice.
To twist a Dr Laura quote (I had to look this up on Amazon, Honest)-
“A good property manager is hard to find, and hard to keep.”
Learn the proper care and feeding of your property manager and you will both prosper and be happy and all that mushy stuff. (Just kidding about the mushy part).
(and yes, I have a twisted sense of humor and am willing to resort to self-ridicule and make up silly book covers just to try and capture my audience in order to deliver my message)
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