Property Management and Pandemics – Things to Consider and Questions to Ask
COVID-19 is causing a lot of uncertainty in our future. Many businesses either aren’t open or aren’t running at full capacity. When it comes to making sure your wealth and investment strategies are secure for your future, you want to be sure that you are partnering with a company that can withstand everything that is going on. Property management companies are developing and implementing policies related to COVID-19.
Will Your Property Management Company Survive After COVID-19?
"Large property management companies are reacting quicker than smaller companies, as 69 percent of property management companies managing 500 or more units have already enacted social distancing rules, compared to 54 percent of those managing less than 500 units."- Source
If you are working with a smaller company that does not have the financial backing to withstand the shutdown and loss of rents, they may not be able to maintain their normal level of service like a larger company can.
For example, if they cannot pay their contractors because they do not have adequate inbound money, they may not be able to get properties fixed in a timely matter. This could lead to angry tenants or potential damage to your property. If they cannot market or spend the money to market your rental property, you may end up with a vacancy for longer than you anticipated. That is going to affect the cash flow you may be dependent on.
You should ask your property management company about three specific concerns:
1) What are the margins that they operate on?
Being they might not be collecting rent on some properties, are they able to stay in business? Some businesses make high margins, and some make low margins. Typically, the smaller a business is the smaller their margins are, and they may not be able to sustain that loss of income for an extended amount of time.
2) What types of properties does your property management company manage?
What if most of the properties they manage are the hardest-hit ones in the area? You will want assurance that they can sustain the staffing levels to manage your property and give you the service that you need.
3) Do they have the financial liquidity to withstand loss of rent and loss of revenue for a certain amount of time
If they deal in short term rentals or other types of properties that have experienced more of an effect, how is that going to affect your rental property, contractors, marketing, and staffing levels? How are they ensuring you a successful outcome for your rental property for the long term?
Does Your Property Management Company Work with Short Term Rentals?
Short term rentals have been significantly impacted during COVID-19.
Does your property management company manage short-term rentals and should you be concerned if they do?
If your property management company manages a significant number of short-term rental property, this could affect you. There is a lot of revenue being lost because of people not being able to book short-term rentals due to laws and restrictions during COVID-19, and as a result some management companies are having to layoff a lot of staff.
Are you receiving the best service and attention that you and your resident need and deserve?
A staff reduction could mean there are phone calls going unanswered and slower responses to maintenance inquiries. If you are seeing a decrease in the quality of your management services and response times to problems, this could impact your tenant’s experience and ultimately your investment property.
Why Are Guarantees Important for a Property Management Company?
A guarantee tells you that a company is doing what they say they are going to do and putting their money where their mouth is. As an investor, you want a property management company that has a vested interest in the success of your investment strategy and goals.
Look at them as a partner who is going to help you buy more properties, pick the right tenants, get the best pricing on maintenance, and keep your residents the longest. You want to look for a true partnership backed up by a guarantee.
Are you looking for an experienced property manager?
If you'd like to talk to us at Mynd Property Management, we're happy to explain to you how we are successfully utilizing technology in the new economy to help ensure your success when it comes to managing your rental properties and helping you reach your investment goals.
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