Things to Consider of Turnkey Management Company
If you’re thinking about investing in turnkey real estate then one of the things you should be aware of is the management team that will look after your property. So, in this article, we’re sharing 3 things to consider of a turnkey management company.
Owning a turnkey rental property should be a hands-off experience. You should enjoy the cash flow without the hassle of managing the property. In order to do that, you need to make sure you understand the management company that will be looking after your property. Here are 3 things to consider of a turnkey management company.
#1. What are they responsible for (and not responsible for?)
Make sure you know what your management company will do for you and not do for you. Most management companies will collect the rent and do basic management. Some might pay some or all of the bills for you, others will not. Consider what will happen when a tenant moves out, or how you will know if a repair needs to be made. There is no right or wrong answer about who does what – but the important thing is that you understand ahead of time who will do what. That way you can avoid any surprises that could occur when you own the property.
#2. What is the management company’s track record?
The management company should be easy to work with and reliable. After all, their reliability is what you are hiring them for so you don’t have to manage the rental! However, not all management companies are the same and some can be difficult to reach, slow to pay, not very proactive, or may even vanish! Of course not all of them are like that – there are many good ones and we work with some of the best! But it’s important to know ahead of time what the management company is like, so make sure you Google them to see what others are saying about them.
#3. What are their fees?
A management company will charge a fee. This is perfectly fair, since they are providing a service. Fees, on average are around 8% to 15% of the rental income, depending on what kind of services the company offers, so make sure you ask what the fee is and what you get for it. Some brand new investors are sometimes surprised by the fee and even feel that it’s too high but it really isn’t: after all, they’re saving you many hours each month.
The most important thing to remember about the management company is that they are part of your team, so make sure that you can work easily with them since you will be working with them for many years.