“How are your tenants?” I asked my uncle, Jerry, over Sunday dinner.
“Great,” he replied. “They’ll be leaving soon, and the house will be cleaner than I left it.”
Jerry is the luckiest landlord I know. Though, in fact, he never aspired to be a landlord in the first place…
He lives and works in the city and, some years ago, bought a retirement home at the coast where he takes off to some weekends. Three years ago, friends asked if he would be interested in earning extra income over the summer by renting his second home to a couple of their friends from the United States who were interested in an extended stay in Ireland.
Since then, it’s become an annual arrangement. For three months of the year, Jerry gives up his property to these paying guests who come to spend time with their Irish relatives. They take good care of his home. Every year he remarks that it’s in a cleaner state than he could ever keep it.
“One of the ladies is an electrician by trade,” Jerry told me. “By the time they leave, she’ll have fixed any electrical issues around the house.”
All this and he never had to advertise his property.
Of course, if you’re hoping to maximize rental income on your overseas property, you’re not going to sit around waiting for some friend of a friend looking to rent your place.
Nor can you afford to be overly picky about who you let in (however nice it may be to have the occasional plumber or electrician rock up for a few weeks).
In most cases, you’re better off handing the job of filling your property to a third party.
So, instead of focusing on finding the perfect tenants, you’ll want to focus on finding the perfect property manager.
A good property manager can bring you a high occupancy, provide reliable bill-paying, screen your tenants, manage any maintenance, and deliver money to your bank account… while you sit back and wait for the funds to show up in your bank account.
In managing your overseas rental, a number of roles come into play…
A rental agent is responsible for keeping your property occupied. They’ll handle the marketing, find you a renter, do any required screening or qualification, supervise check-in and check-out, and verify that nothing’s missing when the tenant leaves.
A property manager takes care of running the property. This typically includes things like paying the utility bills, paying the taxes, and performing any required maintenance.
Many property management companies offer both services. And when they do, ideally, they’ll have a separate fee structure for each service. This will be a real advantage in cases where you find the renter yourself (and only want property management), or when you can easily take care of the property yourself (you’re living nearby) and only need someone to find and manage renters.
Here, I’ll use “property manager” in its generic form, to cover both rental and property management services.
What To Look For In A Good Property Manager
At a minimum, your property manager should offer:
Statements: Make sure they provide monthly statements, showing the income and expenses for your property.
Records: The property manager should have receipts available for any maintenance performed, items replaced, or bills and taxes paid.
Payment processing: Review the property manager’s methods of payment—both how he processes payments from the tenant, as well as how he gets the money back to you. Be aware of any fees charged, or any unfavorable games being played with the exchange rates (if you’re not renting in dollars).
Assistance: Make sure the property manager is easily available and responsive in case your tenant has a problem or emergency, and that the tenant has his contact information.
It’s also important to check your potential agency has a good web presence with high Google rankings.
The following items are valuable services offered by most property managers. Some may be more or less important to you, depending on your personal situation, but this is a good starting checklist:
Meet and greet: If you care about repeat business, make sure your property manager meets your tenants and shows them into the property—and that they have a backup system for out-of-hour arrivals.
Bill paying and taxes: For most property owners, it’s easiest to have utilities, phone, and cable bills direct-debited from their bank accounts, with electronic statement delivery. But if you’d prefer not to direct-debit (or don’t have a local bank account), then your property manager should do this, and save the statements for you.
Maintenance items: Property managers should do a periodic check for any maintenance items that need attention… and they should have qualified personnel to fix anything that requires it. Brief inspections should be performed between tenants, and occasionally while long-term tenants are in residence.
Cleaning: Unless you have your own maid for the property, the best place to get cleaning services is from your property manager—both while your tenant is in residence, and between tenants. Many property managers have a staff of trusted maids, who not only clean, but also serve as another pair of “eyes and ears” looking after your property.
Selecting A Good Property Manager
Go with a recommended manager, when possible. If you know other owners who have rentals in the same area, seek out their advice. Find out who’s happy with their property manager, and who’s not.
Then perform a Google search to see which rental agencies come up first since it’s likely that this is the way your prospective tenants will start their own search. If you’re targeting the English-speaking and expat markets in Cuenca, Ecuador, for example, try searching “furnished apartment Cuenca Ecuador” and you’ll get the top English sites. If you’re targeting the local or Spanish-speaking markets, try “departamentos amoblados Cuenca Ecuador” to get the top Spanish rental sites.
High Google rankings for property managers should place them high on your own list, too.
It will also be worth your while to sit down with any candidates for a talk, prior to signing on with anyone. They can describe their services and answer questions about the market… but you’ll also come away knowing if this is someone you want to work with.
Take a good look at their proposed contract to make sure they’re taking responsibility for the important tasks you need them for—things like collecting the security deposit and rent. Also, they should be responsible for taking inventory before and after a rental, and collecting for any missing items.
Verify that the property manager’s fees are reasonable and competitive by checking with others in the area.
Also ask the property manager if he has a particular type of tenant that he specializes in. If so, see if it matches the kind of tenant you’d like to have.
And make sure that he’s willing to establish any restrictions that you want to impose on the property: things like smoking, parties, pets, etc.
Finally, the best time to find your property manager is before you buy your rental property. There’s no better way to find out the type of property that rents best, the locations that are most sought-after, and the type of tenant that you should target. And after your purchase, your manager may also have some useful connections to help you with renovation and decorating.
Managing an income property is one of the best real estate investments you can make today. And taking the time to find a good property manager will help you to realize the potential of your property, while making the experience as carefree as possible.