Management is a beast.
It’s the bane of an investors existence.
You got into investing for passive income, but you want to keep your thumb on the investment.
I mean, no one is going to do it as well as you’d do it yourself… right?
Management is probably the most important piece to get right when it comes to investing. The right manager can take an average deal and make it perform well. The wrong manager can sink a great investment in fees and negligence.
So what does that look like? How do you stay plugged into your investment, without suffocating your manager with micromanagement?
Keep a pulse
There is no such thing as a real estate investment you don’t have to pay attention to. It just doesn’t exist. Not unless you build the management team to handle things exactly how you want them to. And even then…
Keep a pulse on your investment. Take responsibility for your role in managing its performance.
- Review your financial statements monthly
- Review maintenance work orders regularly
- Review your documentation, it’s possible you already have the answer to your question
- Pay attention to the market your investment is in
- Use the technology available to you
- Respond to emails
- Pay invoices quickly
What is your investment strategy?
Management is subjective. There isn’t a one size fits all approach, and often the answer to problems isn’t obvious.
Do you know your strategy?
If so, do you know if your management team supports that strategy?
This is your investment. You have a responsibility to contribute to its performance. If you have a strategy, spend some time communicating your goals to your management team. They cannot help hit goals they don’t know about.
If you don’t have a strategy, don’t have an end game, and generally don’t care about how the property performs, then sure- check out and allow the management team to handle things as they see fit.
What do you need?
Property management is a business with a strategy, goals, process, and culture of its own. Synergy between their operations and your needs is critical.
- Are there any parts of the process you want to be involved in?
- Does their process support your involvement?
- What kind of communication do you expect from your property manager?
- When do you expect to hear from your property manager?
- Are you willing to use the technology and/or communication channels they use?
- Are you comfortable with their maintenance process and the vendors they work with?
- Do you like them?
- Do you trust them?
Intent Matters
Management is as much about the relationship you build with the manager as the asset you own.
Your property manager likely only talks to you when there is a problem. It’s enticing to send out a spicy email that demands answers and assumes someone is dropping the ball, but brash emails erode trust and hurt communication (especially when communication is infrequent and centered around problems).
- Work with a property manager you genuinely like and/or trust.
- Make it easy for them to work with you by responding to emails and speaking respectfully.
- Lead with trust and curiosity when you’re disappointed or confused.
- Keep the shared goal at the center of the conversation.
- Work together to solve the problem.