I found Dustin Heiner’s website, MasterPassiveIncome.com, the other day when reading a Real Estate Investment related newsletter. He offers some really great, first hand, advice to Investment Property Owners. Dustin is a real estate investor himself so the stories and tips he passes along are tried and true. One of my favorite articles that he posted recently on his blog is titled 7 Keys to Hiring an Awesome Property Manager.
He opens this article saying, “There are two types of people I love to pay in this world. One is my accountant and the other are my Property Managers (PM). They are the muscle of my business and allow me to be truly passive in my investing. Without them, my business would not function as well as I would have to do more work than I want to.” Of course, as an Auburn CA property manager, I loved reading this. But Dustin is right, if you are wanting to be a true passive real estate investor, that means dialing in your properties so that they are working for you, and you are not working on them! A lot of Auburn CA investment property owners live out of town. They rely on a quality property management company to manage their rental properly. It pays, as Dustin agrees, to hire a good property manager.
Dustin goes on to detail the 7 keys to hiring a property manager: Communication, Trustworthiness, Accountability, Quality of Work, References, Commission Percentage and Other Fees. Below, I will apply these 7 Keys to how Barrett Property Management provides property management services in Auburn, Colfax, Applegate, Weimar, Meadow Vista, Clipper Gap, and surrounding Northern California foothill communities in Placer County.
Communication: Over and over again, when I return phone calls from potential Auburn tenants or Auburn owners, one of the first things they almost always say to me is “Oh wow, thank you for calling me back so quickly!” or, “Gosh, I called another Auburn Property Management company last week and they still have not returned my phone call!” Unbelievable! It always blows my mind how people can operate a company without great communication. Communication is KEY to a successful rental. I have been saying this since the inception of Barrett Property Management. We DO call people back, and even better, we answer our phone! My slogan is “I’d rather answer my phone at 9pm on a Friday night than return 20 voice messages on a Monday morning.” And Dustin is absolutely right when he says, “When I am screening out PM’s before I invest in a new area I expect the PM to be on their “A” game and be in constant conversation with me because he wants to get my business. If the PM has horrible communication timelines and abilities while he is trying to get my business, I can only imagine how much worse it would be when I actually hire him to do the job.” Great advice to any Auburn real estate investor!
Trustworthiness: You absolutely must feel like you can trust your property manager. I often tell some of my close colleagues, “When I have to work at getting a new investment property owner for months, then I know they’re going to be a great person to work with.” Why? Because all the months they spend getting to know me we build trust. I once met with a local Nevada City CA investment property owner every few months for one year before he decide to hire me! He had always managed his nine properties himself but was moving overseas in the next year. He had taken a year to interview local Nevada County CA property management companies. At the end he told me that I was the only one that kept in communication with him and was always willing to answer his questions and concerns. He is one of my best clients to date. So, what Dustin says is true, “Don’t put up with a bad property manager. Get rid of them quickly. Like an employee, hire slow, fire fast.”
Accountability: I always tell my Auburn Investment Property Owners, “You choose how much you want to be involved. It is our practice to be in constant communication with our property owners, but if you only want us to call you for issues/costs above a certain dollar amount we are happy to do so.” As the investment property owner, you are the boss, we are working for you. So, Darin is absolutely correct when he says, “Everything the PM does should be ran through you, and you should be able to verify what they do.” Being held accountable in property management should be a no-brainer for the company. However, we often get clients that have had horrible experiences in the past with their property management company. At Barrett Property Management we provide all of our owners with 24/7 online access to their Owner Portal where they can not only see income/expenses on their property, but also download any invoices pertaining to their property.
Quality of work: A good Placer County CA property management company will have good, quality vendors that they work with. A good property manager will know that their chosen vendors reflect upon them. We just implemented a new Vendor Program at Barrett Property Management. This means that every Auburn vendor we schedule and pay on our investment property owner’s behalf must meet certain criteria, carry a minimum commercial liability insurance policy, and agree to our Vendor Agreement. Why? To protect our owners and our company and to ensure that the work is quality!
References: I love it when new perspective Auburn investment property owners that are considering hiring me ask for references. Why? Because I know that if I gave them any of my existing client’s phone numbers they would all say wonderful things. That is a good feeling!
Commission percentage: Thank you Dustin for touching on this topic. Although Barrett Property Management is one of the more expensive property management companies in Auburn CA, there is a reason. I have a page titled The Barrett PM Difference (see below) in my packet that I give potential investment property owners which explains why we charge 9% when most other local companies charge 8%. I love what Dustin said, “The amount that I pay my PM is based on what I contract with them for their services. Some areas 8% of rents is the going rate and in others 10% is. If it is hard to find a good PM in a specific area, you may pay an awesome PM 12% because you are getting awesome service for your money. I have an area where I am paying 12% for my PM, but he is worth every penny.”
Other Fees: We strongly agree with Dustin, as you can see from The Barrett PM Difference above, when he says, “On top of the commission for the monthly rents, it is wise to watch out for other fees that they may charge you. These fees add up quickly and eat into your cash flow each month.”
THANK YOU Dustin, for writing such a wonderful blog post. I’m grateful for industry colleagues like you. And to all the Auburn CA Investment Property Owners out there, we are happy to be of service to you! Barrett Property Management, Inc is in the process of opening an Auburn CA office location to better service our Placer County clients. In the meantime, we still provide our services to the Placer County area as well as Nevada County. Our main office is located at 731 Zion Street in Nevada City, next to SPD. You can visit our parent website at www.BarrettREServices.com to read out our team members and the services we offer. I’d like to leave you with what Dustin said in the end of his article, “The biggest thing I can leave you with is this: When you get a good PM, pay them and treat them well. The PM whom I pay 12% of the rents, which is rather high for a percentage, is worth every penny.” Cheers! Amelia
