That’s’ right. I said it.
Managing your managers is kind of like being a diligent mother… because you have to keep your eye on them or they might try to get out of doing their chores!
Think about it for a minute.
Just like you want your kid to pick up after himself, take out the trash, take care of his room and belongings, and be polite to your friends and business associates… well, you want your property managers to do the same!
You want your property manager(s) to:
1) Treat tenants and prospective tenants with amazing hospitality
There is nothing worse than a smart-mouthed, rude property manager who is showing your property or who is in charge of communicating with your existing tenants (that you want to continue renting for a very long time to come). Your managers need to have great (not just good) people skills. They are going to have to deal with awful tenants from time to time. They need to know how to interact with grace and diplomacy, no matter what. Otherwise, things can go wrong and you might even end up in court (with disgruntled tenants). While you will likely win the case, who needs that type of time-consuming hassle?
2) Understand the importance of maintaining your property
You want your property managers to feel a sense of pride in what they do for you. That means they need to use their eyes and ears effectively. For example, does your manager walk past a broken fence or cracks in front patios without mentioning these issues to you? These things matter. It’s not just about the depreciation of your property; it’s about what your tenants think every time they pass that broken thing. If your property manager doesn’t bring up all the little things that need to be repaired, you won’t know about them and won’t budget for the repairs. A good property manager walks the property with a clipboard and takes note of things that need to be fixed. Tenants notice when repairs are consistently performed. They appreciate the effort and as a result are more likely to recommend your property to their friends.
3) Collect rents on time and in a professional manner month after month
You have to keep an eye on this performance marker closely. The professional property manager doesn’t just collect rents on time for the first few months of his/her job. But that is what you might see in poor property managers. They perform really well just long enough to gain your trust and then things go downhill. Soon rents are not being collected, or they aren’t being reported accurately… or when you inquire what’s happening you start hearing excuses. That’s when you need to have a little chat with your property manager. Just like a kid in trouble, that individual may try to make excuses. You can give him/her a chance to correct the behavior, but make it clear that something needs to change. Stay within the rules of HR law, however. You can’t just walk in and fire the person. (Just like with your offspring, there have to be clear and well-established rules.)
4) Keep in weekly communication with you
Call it a report card. Call it a weekly update. I don’t care what you call it, but your property manager has to understand that you’re going to need a weekly report about the condition of your property as well as the welfare of your tenants. You want to know about any and all issues, so you can come to a resolution together. You will be paying for the correction of those issues; the property manager needs to report them to you so you can triage what is most important. A good property manager will triage for you… telling you which is most critical.
Always Be On the Lookout for Good Managers!
Call it what you will, but you need to be in a consistent interview mode. When you attend real estate investing educational and networking events, you’re on the lookout for great managers.
That way you won’t be stuck if yours goes rogue.
When you’re out and about in your daily real estate investing life, you need to be prepared.
- Know what you’re looking for upfront – You can’t ask for what you don’t first understand really well yourself. It’s like honing a great elevator pitch. The best derive from understanding exactly what you want before you talk to people. Have a laundry list of tasks you need a property manager to perform. In fact, developing a list of questions you would ask a prospective property manager is a great first step! (You can grab my short list at the end of this article.)
- If things go south, cut your ties – This is where my analogy of motherhood ends. With your kids, you can’t typically kick them out of your house, though tough love dictates it’s sometimes necessary. But with a bad property manager, don’t keep giving them chances. If you have a list of prospective managers, you can more easily let the bad ones go. Turn them loose; open the cage; release them back into the wild. Earlier in this article, I suggested giving people a chance to change their ways, but notice I didn’t say give them chance after chance after chance. That doesn’t work and it will only show them that you don’t mean what you say. You have to give them a chance to change, but if they can’t it’s time say ba-bye. (But do it legally.)
- Network, network, network – it’s a great way to find new managers. In fact, there’s no better way to find better managers than by letting your associates who are also property owners know what you’re looking for in a property manager. Referrals and recommendations are the highest forms of compliment. Just like so many other areas of life and business. It’s who you know… and who they know!!
What about those property managers who are doing a great job for you?
Just like kids who are doing what you ask and who don’t cause problems for you as a parent, you want to reward the heck out of property managers who are doing a great job.
- Recognize them for what they are doing right… if possible, in public and in front of their workmates.
- Reward them with a gift card to their favorite store or a Starbucks gift card. (If they love coffee, they’ll also love that reward. Plus, you can choose a card that expresses your thanks because Starbucks has a wide range of thank you gift cards.)
- Mention them in your newsletter if you have one. For example, you may have an email update to tenants that goes out monthly. Give a fun shout out to the property manager. That helps build a better relationship between tenants and the manager.
- Send a handwritten thank you card. Yes, it’s an old-school move, but your property manager will be delighted that you took the time to send him/her a card of thanks. (Especially if it also contains a little gift card.)
The point is that when you recognize and reward good behaviors, you should get more of the same. Basic psychology supports the truth of that comment. And remember the golden rule… just like with your kids… admonish in private; praise in public!