Dear Patty - Owner and Property Selectiveness
Friday, October 25, 2013
I want to grow my property management portfolio to increase my profitability. I have been successful in listing the majority of owners I come in contact with, but I feel like I am overwhelmed with owner’s unrealistic demands and tenant dissatisfaction. Where am I going wrong?
Your big mistake is that you are working with clients that you probably should have never taken on in the first place.
While it is top priority to grow your portfolio and income, rejecting certain types of accounts is essential to the success of your company. Growing a portfolio must be done in an efficient manner with the least liability. Otherwise, you are setting yourself up for failure and your clients for disappointment.
Following are two very important recommendations for growing your portfolio efficiently.
1. Screen prospective owners. Not all clients will fit your property management model or be suitable for the services you provide. When screening an owner, make these inquiries:
- Are they financially capable of being a landlord?
- Are they up to date on their mortgage, association dues, taxes, etc.?
- Is there a tenant currently in the property? Are there any issues that you need to know about?
- Have they used a property manager in the past? If yes, how did they feel about that experience?
2. Do not take on properties that do not meet your minimum condition requirements. Never accept an account without first viewing the exterior and interior of the property. Your expectation of what "rent ready” is might not match the owner’s expectation. This can cause friction between you and the owner and will likely result in an unsatisfactory tenancy.
By following these two recommendations you will become more profitable at a faster pace. You will have more time to focus on productive work rather than navigating through owner and tenant complaints. When everyone’s expectations are set correctly, your business will experience stability.
"Patty the Property Manager” appears courtesy of the ORRA Property Management Subcommittee. Readers are invited to submit property management related questions to Patty by sending an e-mail to firstname.lastname@example.org.
The ORRA Property Management Subcommittee provides this property-management advice column as a service to ORRA members. The column is intended to provide a general understanding, not as a substitute for individual legal consultation. The column should not be relied upon in specific situations without consulting a real estate attorney.