This article is a fantastic synopsis of why unit owners should hold their properties in a legal entity such as a LLC. The LLC will shelter you from lawsuits arising from incidents on the property in question. Brandon with BiggerPockets sums it up nicely. Check it out HERE.
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Finding the best property management company for your unit can be daunting. You already must deal with the difficult decision of handing it over to a stranger, how do you decide which one is the best for you?
Here are three things to consider:
First, the small things count. Window shop a little, and check out the website of different companies. Do they look professional and appealing? If you were a tenant, would you like the site? What kind of reviews do they have on Facebook, Google, Yelp, etc? Are those reviews from owners or tenants? Look for a mixture of both. Of course, you would like an abundance of glowing reviews from fellow property owners, but the tenants are who pay your rent. Tenants now do their rental searches almost exclusively online, make sure they are getting a good impression. If the company has a bad reputation with tenants, they may have a hard time attracting qualified renters. After you’ve identified the ones you like, go visit their office. Make sure it looks professional, the staff are courteous and responsive, and it ultimately gives off a professional vibe. First impressions matter for both owners and tenants.
Second, you should be looking for a MANAGER, not necessarily a company. The person handling your account is who you will be interacting with. Find someone you know, like, and can build trust with. You should always meet with several different people to compare their competence, professionalism, and integrity. If a manager isn’t willing to meet with you to talk through the process and answer questions, even on multiple occasions, move on. This is a person you will be doing business with for an extended period of time (2.5 years on average). Establish some common ground and nail down both sides’ expectations.
Finally, consider their pricing structure. Once you have established that you want to do business with a specific person, you need to be comfortable with the cost. Be wary of the “sticker price” some companies put out. “We will manage your unit for a low fee of 4% per month!” Sounds great, but did you notice the fine print where you pay a $200 tenant turnover fee, 4% of rent even if the unit is vacant, a new account set-up fee of $100, $5 document mailing fees, etc? A manager should be able to provide you with a simple list of what their fee covers, what it does not, and how much those extra services cost. If you are unsure about something, ask. A professional manager should be upfront and honest about the agreement you are entering.
The manager you choose to work with will be vital in your financial success. Do the research, interview multiple people, and establish clear and open communication before entering into an agreement. This person will be your eyes and ears on the day to day goings-on of your unit, make sure you can trust them. If you would like to know what Cornerstone can offer you, please visit our Owners page.
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