1. How far do you live from your rental property?
If you are close you may be able to make the regular visits required for maintenance, inspections, collections, etc., otherwise the further you live the higher your travel time and expenses will be. The larger the distance the harder it will be to have eyes on the property There is also the potential for the middle of the night emergency call that requires your immediate attention. The City of Fort Worth has a requirement that if an owner is not local they have an appointed local contact for the property. http://fortworthtexas.gov/rentalproperty/.
2. How do you deal with stress?
We all like to think of ourselves as level-headed and even-keeled, but at the end of the day it takes a special kind of person to deal with the ups and downs of property management. Behind the seemingly simple task of collecting rent every month lie a number of unpredictable problems can push people to their limits. Ask yourself how you would react in the unfortunate event that tenants:
+Get in fights with other tenants or neighbors
+Have domestic disputes
+Conduct illegal business in the dwelling
+Carry on all night parties and revelry
+Try to sneak extra people or animals into the home
+Decide to sue you
+Trash the property
+Incite the wrath of the HOA because of repeated deed restriction violations
+Refuse to pay rent because they are a "professional tenant" and know how to work the legal system for the maximum amount of free housing at the owner’s expense?
3. How many rental properties or units do you have?
As your portfolio grows so do the management challenges, and it becomes easier for things to fall through the cracks. Investors with large portfolios stand to reap significant benefits by leveraging the efficiencies a property manager can provide. Size can also constrain investors' ability to consider purchasing new properties if they're already maxed out managing their current holdings.
4. How much experience do you have with maintenance and repairs?
Finding reliable contractors can take a while and in the meantime you may unknowingly hire people that are unethical, uninsured, do poor quality work, over charge etc. Maintenance and repairs are a significant component of landlording and if you question your ability to ensure the work is done well and in a timely manner, you might want to consider hiring us. We have been in the business for over 20 years in this area and have long established relationships with great providers. We are happy to share those vendors with you to ensure you are benefitting on pricing and timeframe.
5. How quickly are you able to get your unit rented?
Advertising, fielding calls, and showing the unit can take a considerable amount of time, but are critical tasks as vacancies will quickly eat into your profit margins. If you question whether you have the skills or the time to make this happen, OR if you have historically had an unacceptably high vacancy rate, you may want to consider hiring The Culpepper Team. We can get the unit rented on average in 3 weeks time. We utilize all the methods that we would utilize to sell your house and can keep your vacancy rate to a minimum.
6. Are you capable of handling the accounting and record keeping for your property?
From profit and loss statements to tax deductions, this area needs special attention and becomes an increasingly larger burden for larger portfolios. Some owners (especially those with a background in finance) will do just fine, others may opt to hire an accountant to help with the bookkeeping. If you feel like this might be a weak point you might want to consider hiring a property management company. The Culpepper Team outsources our accounting to a third party CPA company. This provides accuracy and expertise on all of your files.
7. Are you willing to be on call 24/7/365?
It is important to answer this question honestly, because when an emergency happens at your property you can't ignore it. Your special event, important meeting, vacation, or personal crisis doesn't relieve you of your obligation to your tenant. These emergencies don’t happen all the time, but when they do you have to be willing to handle them immediately. Can you handle being called at 2 in the morning to fix someone's overflowing toilet?
8. Are you willing to confront tenants about late payments and if need be evict them from the property?
Many new owners dislike feeling like the bad guy and try to be understanding by making exceptions. The problem is that this only invites additional abuses and excuses by tenants. Late payments must be dealt with immediately, and while sometimes a friendly reminder is all that’s needed, other times, it can be a very confrontational process ending in eviction. In my experience in property management these situations are rare but when encountered experience and a firm hand are critical.
9. Promulgated Contracts from TREC and TAR.
Ensuring the property is run in accordance with the law and on the proper documents is critical in both preventing lawsuits and shielding yourself from liability if you are sued. The Culpepper Team utilizes Texas promulgated documents to ensure that the agreement is clear, binding and enforceable in a court of law. We are a licensed real estate brokerage committed to up to date information and changes as the laws and documents change.
10. From a financial standpoint, is managing your property the best use of your time?
Ultimately, your decision to hire or not hire a management company should hinge on whether or not it is a good fit with your lifestyle and makes sense financially. Individual investors will have to assess the opportunity cost of both options based on their unique circumstances. We feel that the leverage you gain by outsourcing your management to us allows you to maximize the other areas in your portfolio.
