Why use a Third-Party Property Manager?
When buying turnkey properties, one of the so-called advantages providers promote is in-house property management. While this may look like a benefit, consider these thoughts.
Is property management their primary business? Effective property management is a full-time, all hands on deck type of business. Often, providers have a separate division to handle property management, but it still falls under their broader umbrella. Are they able to provide the best service at the best cost? Without a full-time maintenance staff, you may be paying too much for repairs and routine maintenance calls. Who is their competition, and how do they compare on costs for monthly management, re-leasing fees, marketing fees and repair charges?
Property management is not a high-paying endeavor unless it’s done in quantity or with higher than average fees. Look for the “nickel and dime” or junk fees that may be making it worth their time. It may be the difference between a profitable property and an annual loss.
If they are strong on their property management, are they still able to find and offer the best deals for their area? We rarely see a single company that is able to combine the service of offering the best deals with the best property management.
A third party can be a valuable tool for cost savings. Because property management is their primary focus, they will usually have lower fees and more cost-effective resources available. They can be your eyes and ears to verify all information and catch items that may have been overlooked or unconsidered. They can also be a great resource for evaluating future purchases. Using an independent property manager creates a better system of checks and balances to insure your best interests are being served.
The provider is familiar with the property. What’s the harm in that? Well, it’s just that: They are familiar with the property. Items may be missed in inspection and overlooked when vacancies occur or repairs are needed. Sometimes familiarity breeds complacency, and in considering your substantial investment, it is best to have all the details reviewed with the utmost care.
As a property provider, we find it valuable to partner with outside management to insure we are providing the best properties and maintaining the highest quality of those properties. Knowing there will be a second and third set of eyes on the products we offer allows us to feel confident in knowing our buyers will be well taken care of.
As an investor, we always choose to have an outside management company evaluate and manage our investments. They have not only saved us from an unwise purchase, but allow us to buy outside our home area with confidence. We’ll save the “one stop shop” mentality for shopping at Walmart, not for investments.
Would you like to learn more?
Ross Pittman Asset Group, LLC is located in Charlotte, NC and maintains a growing rental portfolio. We are always looking for ways to improve and love to share information with other investors.
If you would like to become a Funding Partner, have additional questions or would like to review our Prospectus, please visit our Funding Partners page at www.rosspittman.com.