As an investor’s portfolio expands, it becomes obvious that managing the properties yourself is inefficient and wasteful. Hiring a Toronto property management company is the prudent, cost-effective choice. It will allow you to:
1. Manage occupancy in a timely manner
2. Drive up the value of your lease rates
3. Take care of day to day operations
4. Respond to tenant questions or complaints
5. Efficiently respond to emergency situations
6. Manage accounting and paperwork
The problem is that while potential benefits are considerable, the damage from choosing the wrong property management company can be disastrous. Let’s recount a few mistakes that should be avoided when choosing a management company, as well as signs to look for that show that you might walk away from a choice.
If you can’t find a property manager for some reason (your new real estate is out of town away from the center and no one will take it on, for example), it is better to manage it yourself than settle for someone you haven’t checked. Some investors make the mistake of being too trusting, others get involved with bad managers because of low operation fees. The result is often a poorly managed property that costs you money instead of being a source of income. This may mean that you should find, interview and decide on a property management company even before you buy.
To make sure you get everything covered, ask those questions:
1. How long have you been managing properties?
2. What is your current vacancy rate?
3. Do you have your own maintenance crew?
4. What kinds of properties do you manage?
5. Do you manage property exclusively?
6. Do you also provide brokerage services?
7. How often do you send out reports and checks?
8. How often do you have to evict tenants?
9. What certifications do you have?
10. Are you licensed?
Then there are some red flags to look for:
Unpleasant or unprofessional behavior. You will need to have a trusting, functioning relationship with your Toronto management company. They will be your representative with the tenants. If you feel that the “chemistry” is not good and you don’t want to interact with those people, then don’t.
Limited hours of operation. There should be no time of day, week or year when the property management company is not there to do its job. Regular office hours and a business week don’t apply in this line of work.
Not responsive. If they took too long to answer an email or get back to you over the phone, then they are either too busy (and can’t handle more work) or are generally non responsive. Either way, this is a bad sign. When this happens during the day, the same thing will happen during a late night emergency.
Never rush into this relationship. Many first time investors check only the price, and if the manager is registered with the better business bureau and stop there. This is the second most important decision you make after choosing the real estate itself. Research your potential property management company for a good long time. Look for references, reviews, talk to their other clients. Take the time to travel to their other properties to see what condition they are in.
Good luck! And if you need any more information or advice, feel free to contact us today. HighGate is here for you.