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Five Considerations of Hiring Property Managers

1. Management Fee
The property owner needs to understand the purpose of the management fee (typically 10%). The percentage management fee pays for the property manager’s time. The 10% allows someone else to help shoulder the burden of owning the property. The owner is paying for someone else to field 2:00 am calls. It is important to remember that the property manager cannot take all of the responsibility and burden off the owner. In the end, it is the owner’s property and the owner’s responsibility.

2. Interview
When hiring any professional, an interview will be conducted to hire the correct candidate and then the professional is left to alone to do their job. Working with a property manager is no different. During the interview process ask good questions; require forthright answers, hire the right candidate, and then get out of their way. If an owner is a high micromanager then they should hire a certain type property manager (see Property Manager categories below).

3. Personality fit
The owner’s personality has to fit the property manager’s systems and procedures. Sometimes owners will have difficulty with a property managers systems and procedures. If a property management company sets office hours between 9-5 Monday through Friday and owner wants an update on their property @ 6:00pm on a Friday evening they will have to wait until 9:00 am Monday. This may drive some owners crazy who want to be very involved in the day-to-day management. If this is the case they probably should hire a manager who will be more responsive to the owner’s needs.

4. Communication
Communication is a two-way street. It is not only the property manager’s responsibility to communicate effectively. Owners should understand they have to lead the property manager in how they expect the manager to manage the property.

Here’s an example: My wife is a director of marketing for a company. She has to be the leader in guiding and directing the advertising agency as to what she wants for the project. She cannot expect the advertising agency to try to guess what she wants in the project.

If your property manager is slow in returning your phone calls explain to them the level of communication you expect. In return, ask them how much communication they expect from you.

Many property managers would rather only communicate with you on as needed basis. Much more than this level of communication from the owner is overkill.

5. Property Manager Categories
While Property managers fall into three categories, the size of the property management company is neither better nor worse than the others. Choosing the size of property manager has more to do with the level of owner pampering and paperwork provided rather than a property manager being good or bad.

Small 1-50 units
Property managers in the small category are usually unlicensed with no training in property management. These managers will have more time for the property owner. This type of property manager is usually not much more than a handyman who will show and rent apartments. If a property owner wants to be hands on and needs to be updated on every specific action of the property this is the manager they should hire.

Pros:
These property managers have the time to cuddle and coddle the owner. They will provide the owner with receipts for repairs and nothing else in documentation.

Cons:
These managers will have no systems in place to and will not be able to negotiate vendor discounts. No 1099s and no accounting documents prepared for your accountant.

Medium 50-150 units

Pros:
These managers have more of a professional approach with the use of some systems. They have the purchase power to negotiate some vendor discounts.

Cons:
The paperwork may be enough for the owner to understand the numbers, but may not be enough information to submit to an accountant or to the IRS.

Large 150+

Pros:
Large companies have invested a lot of money in their systems procedures. They will have an in-house maintenance staff. Their accounting reports can be submitted to an accountant or the IRS.

Cons:
No time with the owner. Communication is very professional, but impersonal, done mostly through email and voicemail. Large management companies offer very little owner pampering and handholding. The downside: even owners who have been in real estate for many years still need some positive reinforcement once in a while.

Achieving a successful home based business stands out as the goal of any home business entrepreneur. One can find numerous tips, ebooks, and websites that provide advice regarding how to do it. But I believe that all this information, as important and as required as it is, can be grouped into five broader categories. You need a purpose, passion, a plan, persistence in carrying out that plan, and patience to wait for the plan to work.Purpose- The first step is easy. It’s the reason you went looking for a successful home based business to start with. Write down the reasons you want or need to work from home as well as what you will do with the extra income you make. Read these reasons aloud first thing in the morning and the last thing at night. You may even put pictures on a poster board to remind you of what you will do with the extra income and place it somewhere in the house where you will see it regularly. Think of them during the day. Doing this will lead naturally to the next step, which is passion.Passion- Napoleon Hill said, “Desire is the starting point of all achievement, not a hope, not a wish, but a keen pulsating desire which transcends everything.” When you develop a strong purpose or desire to work at home, it will lead to a deep, burning passion to succeed. That desire will carry you through failures, by people who tell you can’t do it, and it will help overcome your own doubt. One thing that is hardly ever mentioned to those who are starting their home based business is the need for personal development. A person needs to grow just like their business grows.Plan- Everyone knows the saying, “He who fails to plan, plans to fail.” That holds true for a successful home based business. I don’t know how many people, including myself, have started a home business opportunity without having any idea, or attempting to get an idea, of what to do to be a success. The way to develop a plan is beyond what I will attempt to say here but I will make 4 points. First, the plan needs to written down. A written plan holds a person accountable and gives you a track to run on. Secondly, utilize a mentor, if possible, that will help you come up with a written business plan. A mentor can be someone involved your home based business, someone who already has a successful home based business, or it may be someone that will do it for a fee. Thirdly, the plan should be goal oriented. Goals need to be specific and have a definite date for completion. And finally, be fairly flexible with your plan. You may need to make some modifications to it especially if something just isn’t working. But the main thing is to keep a written plan in place at all times.Persistence- My favorite way to describe persistence is sustained effort. Once a plan is in place, it must be carried out, continually. Create a schedule to carry out your plan and do your absolute best to stick with it. Treat your own home based business like a full time job and eventually you’ll harvest the rewards of a full time occupation. Get the mindset that just as you have to go to your regular occupation on certain days at certain times, you need to work at your home based business on certain days at certain times.Patience- Finally, after the plan is created, and the schedule is laid out and you become persistent in carrying out your plan, you must be patient. This is a world of instant gratification. We want and can get most everything quick. But a successful home based business is not going to happen overnight. It has been said time and again that creating a successful home based business is really a marathon, not a sprint. Too many people quit just before they’re about to see results. Be prepared to stick it out for the long haul.I don’t know of a magic way to make money online. But I definitely believe that one can achieve a successful home based business by having a stated purpose, developing a burning passion to succeed, setting up a firm plan, being persistent in carrying out that plan, and by having the patience to wait for it to achieve its potential. And although there are hundreds of more detailed tips on creating a successful home based business, these are five easy ones to keep in mind.