How Often Should You Shop For a Property Management Company?

Hiring a property management company should be seen as an investment. An investment that can provide you with peace of mind and extra time to work on expanding your portfolio or spend time doing what you love. This doesn't mean that you’ll always use the same property management company forever. As your needs and the market change, you’ll need to regularly assess your property management company to ensure you’re getting everything you still need.

Today, we’ll go over why and how often you should shop for a new property management company.

Performance Decline

One of the early signs that your property management company is no longer the right fit for your needs comes when you notice a decline in performance. As you grow your portfolio, you’ll increase the number of units that need attention. If vacancies are increasing over what the market or local neighborhood average depicts, then your current property management company may need to assess your rental prices and market the units effectively.  Signs can also be seen on the property in the form of deferred maintenance or slow responses. Delayed repairs can cause tenants to complain more frequently about recurring issues. This can harm both your property and your relationship with your tenants. Keeping tenants happy is crucial for maximizing profits.

If you or your tenants reach out and can't communicate with your property management company in a timely fashion, or when reports and updates are slow, these are signs that you may need to shop for a new property management company. Tenant satisfaction generally falls when communication is poor; this can increase turnover rates, which results in longer vacancy periods, ultimately negatively affecting your bottom line.

Major Portfolio Changes

For landlords only renting one or two units, the load on a property management company isn’t incredibly taxing. However, if you’ve expanded your portfolio and now have multiple properties or multiple units, some property management companies may not have the expertise to manage these changes. More units imply more maintenance calls, tenant issues, and leases to manage. As well as more inspections and legal matters to deal with. If your new investment property isn't local, you’ll want a property manager who has experience with the local laws where your new properties are located.

California has many strict tenant laws and safety standards that must be met. With more units, the potential of missing something increases. Therefore, it's important to take this opportunity to ensure you hire a property management company with strong compliance procedures, that performs regular inspections of the property, and has a good history of satisfied clients and tenants. 

Every Few Years

Even if there are no significant issues with your current property management company, it's good practice to formally reassess your relationship with them every two to three years. This helps to ensure the property management company and your goals are aligned in this changing market. If you’ve made recent changes to your portfolio, compare your current fees with competing companies for a better deal. As the market changes and evolves, your property management company needs to be able to keep up. This may include an online presence, tenant portals, an automated rent collection system, and vendor management software to ensure your property is always taken care of.

Rent prices, tenant expectations, local laws, and competition may change the dynamic of your rental property. You need to make sure your property management company is able to adapt.

Waiting until things go wrong can be incredibly expensive. Being proactive and evaluating your property management company when major changes happen, or just to make sure they can keep up, is a great way to protect your investment and maximize returns. If any of these situations occur or if you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online.