“Risk comes from not knowing what you’re doing.” Warren Buffett

You have a nice building in a good rental area which should, on paper, provide you with a good return on Investment (ROI) but you are having problems with late rents, evictions and you are receiving notices from your city’s Code Enforcement Department.

It may be time to look into new management.

WHAT TO LOOK FOR Before changing or hiring a new manager, you should be asking a number of questions such as:

1) What hours will you be available?

2) How do you handle after hours emergencies?

3) Will you work with my vendors or my resident manager?

4) Do you manage other properties in the area of mine and can I speak to the owners?

5) Other than the basic management fee, what additional fees do you charge?

6) How many units do you manage and how large is your staff?

All these are questions to ask before asking about monthly fees. A bad property manager can cost you much more than you spend in fees. Similar to hiring an attorney, competence is more important than pricing.

COMPARE It is a good idea to check with a few companies before agreeing to one. You should ask friends, look for signs of property managers on buildings close to your building and ask for referrals from other property owners. Compare what you are spending on your current property manager and also compare the price of doing your own management. It may not be feasible to manage your property yourself because of area or time constraints. If you can include yourself in the choices, it will give you a better idea of the value that is being provided.

CHANGING CURRENT MANAGEMENT. If you have decided to make a change, check out any contact you are currently involved with. It is always a good idea to keep good records of calls to your manager, responses received and issues settled and unsettled. Keep a record of responses from tenants and vendors as well. Check the fine print of your contract and you may want to have your real estate attorney review it as well.

I have had a couple of instances where I fired managers who were still under contract, but not doing a good job. In those instances, there was no dispute, but that is not always the case. For most of my career, I have self managed my properties, but that is not always possible, so make sure that you always read each contract carefully. Remember, before you sign, that your contract has to be acceptable to you AND the property manager.

REVIEW As the years go by, it is a very good idea to review the job your property manager is doing for your building. Are there other similar buildings in the same general location that run more smoothly than yours? You should always be on the lookout for better managers. Companies, like individuals, change ownership, retire or sometimes just don’t do the job they used to. Additionally, new charges may warrant a change. Choose carefully and keep in mind, your properties are valuable assets for you and your family.

“As long as you live, keep smiling because it brightens everybody’s day.” Vin Scully

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.