The first thing to do if your property management company goes out of business is take a deep breath. You can't undo what's happened, but you can take some very simple steps to recover and move on. Whether you own one property or several, these steps begin with organizing your records, researching property management companies that service your area and deciding which one is right for you.
Your residential property management company has been a key component in your real estate investment strategy. Now that they are no longer able to serve as that component, there are some things you'll need to do until you can find an appropriate replacement. There are many reasons why this may have happened, but from your standpoint, as the owner, you must protect yourself and your tenants. The first order of business is to make sure you have copies of all the leases currently in effect on your properties. Knowing who your tenants are and what their expectations have been will help your transition to a new property management company.
When looking for your new residential property management company, there are some key points and resources that will help you in narrowing down the list:
The National Association of Residential Property Managers (NARPM®) is a trade association that serves as the "professional, educational, and ethical leader for the residential property management industry"1. "NARPM® promotes a high standard of business ethics, professionalism and fair housing practice. The Association also certifies its members in the standards and practices of the residential property management industry and promotes continuing professional education."2 The NARPM® website allows you to search for certified property managers in an area by several criteria.
Your property manager doesn't necessarily have to be in the same city as you or your rental property. A management company may be located in one city, but serve many surrounding areas. Confining your search to the immediate zip code or town may limit your options. It is best to stay within 30-40 miles of where your rental property is located..
Another point to consider is whether or not the management company is licensed by the Real Estate Commission. The National Association of Realtors® provides an additional layer of ethical standards..
Now you have a list of residential property management companies in hand. What next? You may be feeling a sense of urgency to get a new management company in place, but don't simply pick the first one on the list. Not every property management company is going to be right for you, so you'll need to interview them to see if your needs are a good fit for their business and if their business is going to do what you need. Here are a few questions to consider when interviewing a residential property management company:
What areas do they serve? If you haven't already been able to discover what specific areas they serve, this first question could be crucial..
How long have they been in business? When one property management company goes under, new ones may spring up to fill the void. Inexperience could put you back in the same situation you're in now..
What are their goals and limitations? Any company should be able to clearly define their business strategy to you. Questioning how many new properties they are able to take on, how many they have now, how many they've taken on at one time in the past and how all that worked out are valid questions that can give you valuable insight..
What are your current clients saying about you? Asking for references is a good way to find out what a company is really all about. The company can tell you all the positive things you want to hear, but until you hear it from someone who has experienced it from your side of the fence, you may never truly know..
These steps will help you regroup, find a new residential property management company and make an informed decision on which company is the best fit for your needs. Once you have done your research and chosen a new property management company to approach, you can feel secure in knowing that you have selected a valuable new asset to fill that key role in your real estate investment strategy.
Lehman Property Management is a fully accredited residential property management company serving the Central Pennsylvania area. Please feel free to contact us for more information on our services. www.rentcentralpa.com