How Often Should You Reevaluate Your Property Management Company?

Investors should regularly assess the efficiency of their property management company; this isn't a new concept. However, some investors wait until there’s a significant variation in revenue before making any changes. To avoid this, investors should stay vigilant and proactive.

Today, we’ll go over how often an investor should evaluate their property management company.

Whenever Your Contract is Up

The obvious time to reevaluate your property management company is likely when your contract is up for renewal. Review the quality of services, financial reporting, tenant relationships, and maintenance execution. Compare their performance against contractual obligations as well as industry standards to ensure you’re getting what you paid for. If you have the time, consider speaking with tenants and reviewing past incident logs to evaluate whether the property management company remains aligned with your operational needs.

Reevaluating your property management company as your contract is up ensures they continue to meet or exceed expectations as market conditions and regulations change. This can help to prevent complacency and help to identify gaps in the operations before they affect your tenants or income.

Every Few Years

Even if you're satisfied with how well your property manager is dealing with your properties, it's a good idea to reassess your partnership with them every few years. This helps to ensure both you and your property manager’s goals are aligned. Even minor changes can shift the way you view your property management company. Reevaluating every few years can help to minimize the impact of these changes on your tenants.

Additionally, if your property management company has grown as well alongside you, you should reevaluate in case there are more services or operational support available. For example, if they've expanded their operational zone into an area you’ve been interested in.

Significant Changes to Your Portfolio

When you first hired a property management company, your portfolio may have looked different from what it is now. Some property management companies are better suited for smaller operations, such as an Accessory Dwelling Unit (ADU) or a duplex. If you decide to invest in a larger rental property with more units, the current company may not be able to manage the new load as efficiently as one with more resources. This is also true the other way around. Perhaps you've decided to downsize, and now you're investing in services you’re not taking advantage of.

Assess whether the current services still align with your updated mix of properties and the needs of your tenants. Be sure to review performance metrics and communication standards in order to make an informed decision in your reevaluation.

Sub Par Performance 

California has many strict tenant laws and safety standards that must be met. Finding a property management company that can fulfill this need is crucial. Meaning you're better off with a property manager with strong compliance procedures and a history of satisfied clients and tenants.

You should consider reevaluating your property management company when signs of subpar performance appear. Keep an eye out for recurring maintenance delays, as this can not only upset your tenants, but it can also affect your property. Since deferred maintenance can quickly turn into expensive emergency repairs. Poor communication with both you and your tenants is another sign you should reevaluate. Slow responses and unclear updates show a decline in management performance; this can lead to higher vacancy and turnover rates, which can result in a notable financial loss.

Regularly reevaluating your property management company helps to maintain consistent performance and revenue. By addressing issues quickly as they arise, you can maintain operational stability and make informed decisions that may support long-term tenant satisfaction and consistent monthly income. If you feel it's time to reevaluate your current property manager or if you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online.