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When I started on my mission to generate secure cash flow and supercharge my self-directed IRA, I quickly realized that investing in California was not an option. When properties that cost $500,000 only rent for $2,500, you are not setting yourself up for a strong return on your investment. So, I began building relationships with asset teams and real property management companies across the country in order to attain returns that would actually beat inflation.
Once I realized I was going to be investing across the country, I understood that it would take a rigorous amount of due diligence to find property managers that I could trust to oversee my investments, without me having to be there to monitor the results.
Over the last several years, I have found a couple of key telltale questions to ask when interviewing property managers that will give you a good idea of how they do business.
The first piece of the real property management puzzle is the tenant selection process. Make sure to inquire how your property manager goes about selecting a tenant and what tenants are ideal for these specific investment properties.
Make sure he mentions the following:
- Criminal background check
- Eviction report
- Credit report
- Providing pay stubs
What should your property manager look for in a tenant?
- History of paying on time
- Strong employment history
- Able to refer other tenants
- Willing to sign a 12-month lease
Ensure that the property manager is diligent about following their state’s ever-changing management laws. Just because they are property managers, doesn’t mean they know to make changes to comply every time a law is amended.
When you are interviewing him, make sure he mentions:
- Fair Housing laws
- Tenant screening laws
- Safety and property conditions
- Evictions policy
- Lease addendums
- Lease termination procedures
- Handling security deposits
- Rent collection procedures
If the property manager has detailed answers to your questions, the next piece of the puzzle is the asset itself. Your investment property needs to be up to city code, safety standards, and health regulations.
As you are probably aware, you should see 100% of your investment properties. It’s recommended that you travel to visit each of your investments, but you don’t HAVE to if you make sure you review date marked photos of every square inch of your property, prior to renting it out. Get a full property report and read every word.
Also, be sure to ask for a detailed summary of the current status of your property’s:
- Heating, ventilation and air conditioning systems
When you’re listening to different property managers answers these questions, pay attention to how thorough they are in their responses. You want to be confident that if something goes wrong in the future they are the type of people to handle it, rather than sweep it under the rug for you to find out about later.
When you invest with Cash Flow Connections, we handle everything for you. Real property management selection, market selection, property rehab, and tenant placement. All you need to do is fund your investment and sit back and watch the monthly cash flow come directly to your bank account.
Are you ready to start seeing monthly checks?