How do buy-and-hold investors make money? The answer is finding the right tenants.

Property management companies take on this responsibility, so you don’t have to worry. Finding and keeping tenants who are a true treasure takes some up-front work that pays off in the long run.

Find your treasured tenants

Property management companies know that tenants are a key ingredient in building a profitable rental portfolio because:

• They reduce your expense liabilities by covering your mortgage payments, property management fees, and other ongoing expenses. Basically, they are purchasing your property for you.
• They increase your monthly income through monthly rents.
• If you made a good purchase decision, the rent you collect from tenants will be more than your expenses. That margin provides short-term profit and/or seeds a healthy reserve fund for maintenance.
• Tenants are extremely important. You want to make sure the ones you place in your property are treasures—they pay on time, live peacefully, take care of your property, and stay as long as possible.

We could go into all sorts of details about how to identify an ideal tenant, but most buy-and-hold investors we know don’t really want to embark on the search for an ideal, long-term tenant. They are especially reluctant to deal with recurring tenant needs because doing so drains time and energy.

Why property management companies focus on great tenants

This is where property management companies come in. We find the right tenants, manage their needs, and provide the overall care of the property to maximize your investment return.

The challenge: Find a property manager who gets results

As an investor, you care about how your property management company deals with tenants. Look at each potential company’s:

1. Vacancy Rate – What percentage of managed properties are vacant?
2. Vacancy Duration – How long does it take to fill vacancies?
3. Lease Renewal Rate – What percentage of existing tenants renew leases each year?
4. Company Culture – Are staff members professional, knowledgeable, and courteous?
5. Tenant Ratings and Reviews – What do tenants say about the company online?

Reviews help you vet property management companies

Another way to assess potential property management companies is to read what property owners and tenants are saying about them.

Before you start reading reviews, please note: you will nearly always see bad reviews from tenants because professional property managers work for owners and investors. We must enforce lease terms to protect an owner’s investment. Remember to keep this perspective when reading tenant reviews and instead evaluate how the company responds to complaints, and then look for red flags.

Examples of red flags:

• There is a recurring theme to tenant complaints;
• The company completely ignores negative reviews;
• The percentage of negative complaints is unusually high; or,
• There are zero positive reviews from tenants.

Remember, tenants are your treasure; they are your customer. They have value!

Want to know more?

Would you like to know more about our team’s track record with tenants, and other property owners? Schedule your free consultation with us today. We’re ready to help you take the next step in creating profitable real estate investments and keeping your valuable tenants happy.