How to Find a Property Manager for Your Rental

Investing in residential real estate presents a tremendous opportunity. It makes perfect sense for many people right now – but that doesn’t mean there aren’t inherent risks in investing in real estate or any kind of investment. 

This year, we’re working with a lot of owners who purchased properties either right before the pandemic or during it. These people, typically speaking, were able to buy homes with incredibly low interest rates. Granted, some of those interest rates were adjustable, so they’re struggling a little bit now. 

However, in every single case where we have somebody struggling or going through a tough time with their residential real estate portfolio, it’s because they didn’t have a trusted partner or advisor in their corner to counsel them when they initially purchased the property. 

I can’t tell you how many folks we’ve talked to this year who bought their properties sight unseen.

A lot of people live out of state. They see something on the internet and get all excited even if they live in California. Everything in Ohio is cheaper than where they live in California. So, how could they possibly lose? 

You have real estate agent licensees out there whose job is to sell real estate; their interest is in pocketing the commission and moving on. Therefore, you can’t necessarily count on the fact that any Realtor you speak to is going to be able to accurately assess the condition of a property or communicate what it will truly cost to put it into service or maintain that property for the long term. 

• Remember: Buying a property the right way is 90% of the battle. 

I know that sounds like a cliché, but if you don’t go in with your eyes open and arm yourself with an absolute understanding of what your return on investment can – and should be – you could be in a lot of trouble. You also need to be aware of what it will cost to put a property back in service, which is part of your capital investment. If all these factors are a surprise to you and your property manager, who had nothing to do with purchasing that property with you, it’s a horrible thing. 

While all investments carry some level of risk, there’s an even greater one when you purchase a property without proper counsel or the knowledge of which questions to ask. You also can’t count on getting lucky with finding an agent who’s going to have your best interest at heart, show you why you’re paying X for the property when Y is a better number, and so on. 

Now, there are numerous times when we have clients who “overpay” for a property because they’re counting on appreciation or have a specific reason for wanting a specific property in that neighborhood, et cetera. 

Whatever you do, make an informed, adult decision to go in with your eyes open. That said, if there’s one particular risk to avoid as a property investor, it’s purchasing something at the wrong price. 

That’s part of why we want to recast ourselves as Invest with ROOST rather than Manage with ROOST. 

Our jobs are almost impossible some days when we find ourselves suddenly taking on the responsibility of helping an owner manage a property profitably when, quite frankly, we have no chance – at least, not in the short term – of helping that owner make any money due to what the property needs and the additional capital investment, which is often required.

Conflict of Interest vs. Conflicted Interest

Let’s discuss the difference between a “conflict of interest” and a “conflicted interest.” 

My concern with you buying properties without the input of your property manager – and vice-versa – is that the interests of your buyer agent and your property manager are very different. 

Not good, not bad, just different. 

If you’re buying a property, your buyer agent is concerned with getting your offer accepted, getting to the closing table, and collecting a commission check. 

On the other hand, your property manager is concerned about your ongoing monthly profitability hopefully for years to come.

These two professionals hold what I think of as ‘conflicted interests’ and it is your job as the investor to keep that in mind when it comes time to expand your empire.

It’s important to strike a balance. You don’t want your property manager engaged to the point where you never buy another property. By the same token, you don’t want your buyer agent to be bringing you deals that may never be profitable.

Is there a conflict of interest between having the same person represent you as a buyer’s agent and as a property manager? In my opinion, the answer is no. I have zero concerns about that provided the professional involved has a clear track record of long-term success with the clients they work with.

What to Know Before Hiring A Property Manager

You’ve got a lot of decisions to make before hiring a property manager. Most importantly, you want to make sure someone is aligned with your values and is excited to help you meet your goals as an investor. Look for someone who specializes in a specific neighborhood or the area where you want to invest. For example, someone who knows all about buying multiple-unit apartment complexes may be a great fit for you if you want to expand into that space. Your rental property manager and management team are responsible for ensuring your investment is cared for while you’re off focusing on other things, so you want to make sure it’s in good hands. 

At Invest with ROOST, our business model extends to four main principles, which we use to help shepherd our owner-investors toward achieving their goals. These principles are what we consider to be our greatest benefits as a property management company alongside the wealth of expertise we possess. 

First, we want to help you acquire analytically.

We want to help you take the emotion away from a potential purchase and help you look at the numbers, figure out what you can expect to collect in rent, what it’s going to cost to put it in service (and keep it in service), then calculate a purchase price based on a suitable rate of return. 

Second, we want to be your resource to manage profitably. That’s where we come back to our Landlord Profitability Playbook. Start every month as day one. Automate your rent collection. Take care of the tenants. Have we earned a five-star review today? Did we get your maintenance request fixed within 72 hours? If it was an emergency, were we on it within the proper time? 

Remember, we succeed when you succeed, so we have to work together as a team and look out for each other because it’s in all of our best interests to do well in this business. 

Third, we want to teach you how to leverage wisely. I think that there’s a space where we want to bring in some knowledge and resources from different lenders – and lending opportunities.

At the end of the day, we can help with any number of things, but we don’t lend money to our owners. Therefore, we want to make ourselves a resource to get you in front of lenders and investors that we know share our views and see the world the way that we do. Hopefully, we’ll be able to connect you to other people and you can work with them going forward. 

Finally, we’re in your corner to assist you with expanding confidently. Whether you get your first property or the next property, we’ll make sure it’s managed profitably – and that gives you added confidence in your decision. We want you to make money. If we do our jobs right, you’re making money on that deal. 

From there, if you need to take cash out, we’re going to help you leverage wisely. Once you take that cash out, we’re going to help you expand confidently to the next property. That’s the essence of Invest with ROOST in a nutshell. 

Learn More About Property Management 

If you want to learn more about property management, download our Profitability Playbook and get a quote for property management services. If you want to get deeper into the services we offer, go to roostrealestateco.com. On the main page, as you scroll down to the Investor section, you can download that brochure.