Have you ever played Monopoly? The nervous excitement as you make your first sweep of the board; the taunts you tolerate from the other players when you purchase the first two streets; the smile on your face as they all start to land on those first two streets that you have now placed hotels on; the complicated financial contracts you draw up with those feeling the pinch of reality. Well as it happens, managing multiple properties is actually nothing like playing Monopoly so forget it was mentioned.
Instead, managing multiple properties is all about letting go – in other words, allowing others to help with managing your investments. This doesn’t let you off the hook, however. You still need to be an expert and you still need to fulfill your obligations. Here are a few things to consider as a property investor.
Find the right property managers
If you are managing multiple properties, it is more than likely you will need to employ more than one property managers. Your approach to employing each manager will be the same. For all the questions you should ask upon meeting with prospective property managers, see our Ultimate Guide to Investing. Beyond these questions there are some key indicators of an effective property manager.
- Are they effective communicators? When you send that first email, how long do they take to get back to you? Is their language clear and accessible and have they clearly addressed your initial inquiries? If they do not actually answer your initial questions (as long as these questions are reasonable), what chance will you have of getting quick and accurate responses to your ongoing communications in the future? If they can’t seem to separate your inquiries into separate and clear answers, this is not only a reflection of how they will communicate with you, but also your tenants.
- Are they knowledgeable? Look for what insights they can give you about your investment property in terms of its particular neighbourhood. Do you present their expertise you voluntarily, assuring you of why you should use them, or does getting information from them feel like drawing blood from a stone?
- Are they personable? Following an initial meeting via phone and email, meet them in person. What are your first impressions? A good property manager should have strong people skills as well as strong organisational skills.
Managing multiple property managers
Now it is up to you to practice what you preach. If you expect timely action from both your tenants and property managers, make sure you do the same. Log the different issues and communications you have had with your different investments in a single spreadsheet, making sure to include the costs involved.
Managing multiple properties yourself
If you do decide to take on the responsibilities of managing multiple properties yourself, be aware of the time demands of this entire process. Make sure to check out some of the considerations to make when leasing your property yourself. If you can allocate the time to effectively manage each property, you can save considerable money on property management fees. However, be aware that the greatest benefit of employing a property manager is that they act as a mediating agent between you and your tenant. This can help you in legal matters and in the process of evicting tenants who may be in arrears for example.
Have the right support
Beyond strong property managers, there are other services you will need and it is important you surround yourself with effective professionals.
With the same principles in mind as mentioned above, find both an accountant and a financial adviser who you can develop strong professional relationships with. Use both your own research with the advice of both your financial adviser and your accountant to effectively manage the finances of your multiple properties and to utilize tax saving measures and exemptions.