Many investors, new and seasoned alike, eventually turn to a management company for help. Usually, they are just burnt out, tired of the late-night phone calls and constantly visiting the property to solve problems. Sometimes, they have no idea what they are doing and need some guidance. Whatever the case may be, owners usually fall into two categories: the hands off, I don’t want to hear about it types and the hands- all- over- everything- you- should- probably- go- to –jail- for- inappropriate- touching types.
As a management company, it is great to have a knowledgeable and involved owner – to a degree. Rent increases, information about the property, guidance regarding capital expenditures, etc., is much appreciated and goes a long way in seamlessly taking over management of a unit. Below I outline some of the worst offenders as examples of when owners get a little bit too curious.
1.) Making Agreements with Tenants and Not Telling Your Manager
Owners think they are helping out and making the manager’s job easier, however, this is far from the truth. Verbally agreeing to lease terms, lease changes, making utility deals, agreeing to exchange services for rent, agreeing to perform upgrades, etc. Directing all communication through the manager so they are aware of everything going on is the best route. Anything agreed to outside of the manager’s knowledge can cause problems down the road or they may have agreed to something different with the tenants.
2.) Visiting the Property Without Approval
Owners tend to forget that they are receiving an income stream in trade for the use of their property as a residence for a period of time. Our lease requires 24 hour notice, provided to the tenant, in order to enter the property. I cannot count on my hands the number of times I have had an owner call, demanding access to the property in the next few hours. What is so urgent that trumps the tenants right to privacy? A little planning can go a long way, both for the management company AND the tenants.
3.) Requesting Tenant Information
Owners sometimes ask for social security numbers, salary information, credit scores, etc. The information prospective tenants give the management company is given in confidence. They do not agree to release this to anyone but the management company. Ask the management company to explain the qualification process they use to qualify tenants and the parameters they use to accept or deny applicants.
Understandably, owners want some semblance of control and information. We are talking about TRUST. If the decision to hire a manager has been made, make sure it’s a good and reliable company. Then just let go. A good company will earn trust. Letting go doesn’t mean not paying attention, not asking questions, or sticking your head in the sand like an ostrich. It means let the company do the work you are paying them to do, with guidance.