Out of state investors are looking at rental income from Kansas City Metro properties and they are amazed at the numbers. However, unless the home stays maintained and rented up, then they could be facing a huge loss.
Many call us here at the MAREI office after they have purchased a home from some turn key rental operator to complain they need a better property manager. For some areas of the metro, we can recommend a good manager that is legitimate and will represent their interests to the fullest.
This is to remind you Landlord Be Aware, there are many fly-by night companies out there who work for cheap and operate under the radar. They may do a great job for you and they may disappear in the middle of the night with all the keys to your rentals and your security deposits. We have heard horror stories of property managers that let a nice family move into properties with out security deposits or even a lease.
So we have some words of wisdom for you before you sign on the dotted line to hire a property manager or to buy a turn-key property that will be managed by the company selling it.
Are You Licensed: On the Missouri side where so many of our investors are snapping up properties, it is a legal requirement that a property management company be real estate brokerage with a licensed broker and licensed agents. In Kansas, this is only the case if the property is commercial.
When you get into the really cheap housing neighborhoods where the cash flow on paper is crazy stupid, it is really tough for a property manager to make money and not many of the quality firms really want to manage the low-income rentals.
We often find many owners with one or two have a friend or family member or even worse their handy man who is managing the property, which might be great for a month or so, but unless they are part owner of the property or on your legitimate payroll, and the home is in Missouri, then the arrangement is illegal.
Let’s See Your Paperwork: Ask them to see their licenses, ask to see their management agreement and ask to see their lease forms. Ask them about their procedures. Do they have a set list of acceptable qualities in a tenant, if they don’t you could get sued for discrimination? How do they keep records, are they secure?
Formal Tenant Screening Procedures: How do they show properties? How do they take applications? What do they charge? What screening company do they use? All of this could add up to good quality tenants or a nightmare tenant or maybe even a fair housing violation if done incorrectly.
There is a lot you need to know, so we have a bunch of resources for you. Rather than retyping everything.