Deciding to hire a property management company to oversee your rental properties and real estate investments is always a good idea. But that’s not the final choice you’ll make. With many different Houston property management companies in the area, you have to decide which one to work with. And a poor or misinformed choice could leave you in a precarious situation. Learn what to look for so that you can avoid the bad apples and find a company you genuinely trust to manage your investments.
The Top Risks of Hiring the Wrong Houston Property Management Company
At surface level, you may assume that all property management companies are pretty much the same. But if you talk to any seasoned real estate investor, they’ll be quick to point out that there’s a wide spectrum. And if you end up with a company on the wrong side of that spectrum, you’re going to experience a long list of undesirable side effects and outcomes. This may include any or all of the following:
1. Poor Tenant Screening
One of the most important responsibilities a property management company has is to screen tenants. A properly screened tenant is more likely to take care of your property, pay on time, and stay for a longer period of time. A poorly screened tenant, on the other hand, runs the risk of trashing your property, paying late, and possibly even requiring you to start an eviction process.
Bad property management companies tend to have poor tenant screening procedures in place and end up hamstringing their clients from the start. When combined with the other risks outlined in this article, it’s a major problem with catastrophic results.
2. Illegal Activity and Increased Liability
A good property manager understands state laws, knows what’s legal versus illegal, and can provide you with the proper instructions and protections against serious threats. A bad property manager either doesn’t know the rules or ignores them, which increases your liability.
3. Higher Long-Term Costs
Bad property management companies cost you money in more ways than one. Whether it’s having to evict a bad tenant, pay a fine for breaking a rule, or having to pay an expensive repair bill for a maintenance issue that should have been detected much earlier, the dollars and cents add up. In some cases, you might even start losing money on a monthly basis.
4. Poor Communication
One of the key ingredients to a good relationship between a real estate investor and a property manager is healthy communication. A good property manager will pick up the phone when you call and proactively touch base to keep you informed of developing situations. A bad property manager is hard to get in touch with. Even worse, your tenants might have a difficult time connecting with your property manager. In a case where there’s an emergency, this subpar response time is costly for all parties.
5. Added Stress
A property management company does a lot of things, but one of its primary goals is to reduce the stress of owning investment property. But a bad property management company can actually increase your stress and multiple your worries. Talk about a waste of money!
How to Choose the Right Houston Property Management Company
Now that you understand the risks associated with hiring the wrong property manager, we’re going to show you how to avoid making that mistake. Here are a few suggestions to help you identify and hire the right Houston property management company:
1. Know What You Want
You can’t find a good property management company if you don’t know what you want out of one. There are a handful of options to choose from, but you’ll get the best results if you find the one that fits your objectives the best. Create a list of priorities – like responsiveness or cost – and filter the various options through this.
2. Ask Around
The best thing you can do is ask around for referrals from your personal and professional networks. If you have other connections in the real estate industry, they’ll almost certainly have some first- or second-degree connections in this niche. If you keep hearing the same property management company popping up over and over again, this is a sign that you’re on the right path.
3. Read Reviews
One of the best parts about the internet is that it allows you to take research into your own hands. After making a shortlist of potential property management companies to work with, proactively look for reviews and testimonials. (Onsite reviews are fine, but they’re even more reliable when you can find them on third party websites.)
When reading reviews, use your discretion. An extremely positive review could be biased, just as an overwhelmingly negative review could simply be from a disgruntled individual with a vendetta. Read the good, the bad, and the indifferent. The truth is typically found somewhere in the middle.
4. Visit Their Website
A property management company’s website will tell you a good deal about them. If the site is current and has lots of fresh, engaging content, it’s a sign that they’re relevant in the industry. But if the website looks like it’s straight out of 2005, you might want to reconsider.
5. Trust Your Gut
At the end of the day, there’s something to be said for listening to your instincts and trusting your gut. If you’ve done all of the research and carefully vetted your list, you should have a pretty good feel for the best option. All other factors being equal, your gut will point you in the right direction.
Green Residential: Houston’s Premier Property Management Company
At Green Residential, we’re proud to be the premier Houston property management company – and one of the most trusted real estate companies in the state. Whether you own a single investment property in the city or an entire portfolio of them spread all throughout the suburbs, we have the expertise and resources to help you maximize profitability and peace of mind.
For more information on our comprehensive property management services, please don’t hesitate to contact us today!