Did you know that more than half of all landlords in the U.S. use property management companies to oversee day-to-day operations of their properties? A study by the National Association of Realtors found 54% of landlords outsource to third-party companies. That number tells us this practice is pretty standard for the industry but owner operated management has its benefits.
When landlords have more autonomy over their properties, they minimize risk for property projects and most importantly the handling of financial, tenant, and vendor data. Training with an expert property management consultant on day-to-day operations and top tier property management software is a great way for landlords to start the journey of having more functional and effective control over their properties.
If owner operated management is the way a landlord wants to go, there are 5 essential things they need to know.
The first thing to consider is strategic planning and execution.
This is a foundational aspect of owner operated management. Knowing who your vendors are, having relationships with them and having direct access to account information and passwords within property management software is critical. Many landlords have unfortunately experienced difficulty in having vital account and vendor information forwarded when they’ve severed ties with a third-party company.
Other factors to consider are the property’s history such as the work performed on the property, the problems solved and the spreadsheets documenting the financial aspects of the projects.
Quality control is also essential for owner operated management.
Working with a property management company can be great but one question every landlord needs to ask themselves is, are the third-party management companies working in your property’s best interest?
The image your brand is projecting makes a difference in your property’s value and profitability. It’s their job to share that image with the local community. Landlords should also be aware of how regularly the third party is visiting the property and how well kept your property is, as it has an impact on everything from tenant retention, regulatory requirements, and more.
As business owners, avoiding risk is essential.
Risk management involves making sure your data, whether that be weekly, monthly, quarterly, semi-annual or annual is backed up. Staying up-to-date and protecting your data at all costs is one of the best ways to avoid risk. This data will consist of financial reporting, bank accounts, cash flow statements, rent roll, resident activity and delinquencies.
Data on day-to-day operations such as maintenance, projects, vendor retention, and resident and tenant retention should also be organized and will keep you ahead of any problems that may arise.
Financial management and reporting is not far behind avoiding risk.
If any sort of data and reporting are disorganized, lost, or difficult to access, your business will face challenge after challenge, hence the need for proper financial management and reporting.
What serves owner operated management is having industry knowledge and networking.
It’s essential to have an understanding of how other management companies manage their properties for day-to-day operations. Networking with vendors also ensures you receive the best pricing and boosts your awareness of the management company’s best practices.
Working with a premier property management company may seem ideal as a landlord, but owner operated management can be an empowering experience when equipped with the right knowledge. Owners can take on a more hands-on and personalized approach which can lead to greater success for both them and their tenants, leading to higher tenant satisfaction and retention rates.
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