So you want to be a property manager?
Property management can be a challenge. If you are new to investing, I highly recommend you manage at least your first few units. It is a great way to learn what is involved in managing a property. If you are working full time or want freedom, you will eventually want to hire a property manager. It has been my experience that proper property management is the most important piece of the real estate investing puzzle. The interesting part is that most of the books on real estate investing that I have read, are focussed on seeking the perfect property manager. I have not found very many articles written by property managers, about property management.
I have also found that not many property managers are focussed on just property management. A lot seem to be real estate agents, contractors, or have another occupation and do property management as a side line.
I find this interesting, since it is an extremely important part of owning investment properties.
I want to make note that we have two great property managers working for us (actually three if you count Shelly and I), however, it has not always been that way. We have hired and fired a couple a long the way.
When I hired my first property manager, they sold me on the concept of set it and forget it. I felt a sense of relief, and it was not until I had a complaint from one of my tenants a few months in, that I started to realize I would have to monitor my property manager.
I have had a few instances of poor customer service provided by past property managers. I might not be involved in all the day to day operations, however, we monitor and meet with (usually by phone or email) our property managers on a regular basis.
You may be asking what makes a good property manager. A good property manager is made up of two parts, the people side, and the financial side.
If you want to become a property manager for yourself or other people, here are some of the traits and skills you will need to be great. You will need to ask yourself a series of questions, if you answer no to most of the following, then please do the land lording business a favor and hire a property manager.
Do you like people? – The love of people will need to be your number one trait. I think this holds true for any customer service position. The interesting part about property management, is you are dealing with people’s homes and money. If you are a positive person, you could make a great property manager.
Do you have the ability to take control of a situation? – Sometimes you have to be able to take control of a situation. If a tenant is not paying the rent, you need to act (within the law) to solve the issue. Investment properties are small businesses. Listen to the story, then take action. We seem to have heard every story possible of how money some how did not arrive on time. When you sign up leases, you need to stress how important rent coming in on time is. The mortgage needs to be paid regardless of the story a tenant tells you. It is your job as a property manager to make sure all rent is paid on time. Yu need to be in control. My advice is to be fair and firm, for example; if a long term tenant needs a couple of day extension after Christmas, it is ok to give it to them, just make sure they know it is an exception.
Are you a hustler? – Property management is an active job. It requires a lot of effort. When you have vacancies you need to get them advertised quickly and be ready to show asap. Good tenants (customers) have choice. When you get an application, you need to work on getting a tenant approved right away. If a tenant has a maintenance issue, you need to have a solution right away. If one tenant has a problem with another, you need to be ready to defuse the problem right away. Be honest, what pace do you operate at?
Do you have thick skin (or are you easily offended)? – People will push your buttons. We come across all kinds of interesting personalities in the property management business. Some times you may have a personality conflict with one of your tenants, however, you will have to keep your mouth shut. The tenants are your customers. There is an old retail saying “the customer is always right”. You might be annoyed because you have a tenant complaining non-stop about there neighbour, however, it is your customer. They are paying the mortgage. You need to thank them for there concern and try to work out a deal between them and the tenant they are complaining about.
Do you operate well under pressure? – If you are working full-time and managing properties, imagine your busiest day at work, then imagine a call that a hot water heater blew up while your tenant was out. The rental apartment is flooded, the tenant is irate (maybe they do not have or cancelled there tenant insurance). They are blaming you and you need to find someone to replace the water heater and help clean up the mess right away.
Are you a good negotiator? – You need to have or learn how to negotiate. You have to be able to negotiate with tenants, contractors, and if you are managing buildings for other people the owners. You will be in the centre of a problem solving circle.
Are you a sales person? – If you have already acquired buildings you likely had to sell the idea of becoming a real estate investor to lenders, and family. That is just the beginning. If you want to manage properties for other investors, you will need to sell the value of your services. You will also need to sell the idea of maintenance and repairs. You need to sell your vacant apartments to your potential tenants (good tenants have choices, why should they rent from you). As a property manager, you will be required to do a lot of selling.
You can learn some of the skills above. Like I mentioned in the beginning of this article, you should manage your first few properties yourself. That way when your property manager calls to say you are going to have a vacancy, you know what that feels like. You can trust that your manager is doing everything they can. If you cannot answer yes to any of the questions above, I would suggest you stay away from property management. If you answered yes to some or all of the questions, then maybe you should consider a career in property management, or at least manage some or all of your own properties.
I would also recommend some education. In Nova Scotia we are lucky. The Investment Property Owners Association of Nova Scotia teaches the CAM (Certified Apartment Manager) course once a year. When you graduate you become CAM certified.
Good luck finding or becoming a property manager.
Michael P Currie