The network I’m with is fairly selective about the real estate agents we deal with. They have to have taken the classes we took and they are usually investors themselves. In some cases, they are commercial real estate agents.
Because of that qualification, I do have a certain degree of confidence in whom they refer. The real estate agents and the investors in the area are probably the best people to talk to in seeing if the property management is any good.
However, I still took the extra step (and this was certainly recommended by my group) in interviewing the property management companies, taking a look at their contracts, and then talking to other members to see their opinion of them. I even talked to the people who were actually renting the place they were managing.
Sometimes, in certain locations, there will be only one property management company in town and you’re kind of forced to live with them. Those are typically areas I’ve avoided.
The order I’ve gone is researching which area of the country I should invest, deciding which one, and then making the contacts, doing the research, and seeing what team I can put together in the area. That involves interviewing the team members, taking a look at their qualifications, and then checking their reputation with other investors. You also have to ask them what criteria do they use when they select tenants, what is their procedure for repairs and maintenance, etc.
There are a lot of aspects of out-of-state RE investing that will really stretch your abilities. Managing from a distance, writing a $8,000 check which you know you have to do because the hot water went out in the middle of winter (and it was a good thing I did it too because it was right before Denver went through three weeks of blizzards), talking to them every month or so to make sure everything is ok, etc.
It’s hard because we of course can probably do a better job ourselves, but success in real estate is not doing everything yourself, but creating a team that will make you money so that you don’t have to work as hard. If your property management is running smoothly, you have more time to look for other properties and other opportunities (and then the whole cycle repeats).
When I get home, I will post you the recommended questions that my group asks of property managers.
