PWR's San Diego Experts: Hiring a Rental Property Manager with Anthony Schmitt
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Welcome to our “PWR’s Experts” column, where we highlight some of our favorite industry experts.
As Financial Planners, we have met many smart and talented people who are experts in their own fields. We have used them as resources for our clients and sources of knowledge for ourselves. We hope you enjoy our next expert!
Our expert today is Anthony (Tony) Schmitt, Broker & Owner of Golden Pacific Real Estate
In the last couple of months, we have interviewed a few real estate experts about buying your first home, investment properties and income-producing real estate. We started this theme because buying real estate or investment property is a common theme we see with our clients. Recently, many of our clients have been interested in buying an investment property and the next step is to find someone to help you manage this asset. We wanted to find an expert in managing properties to give our clients and readers more information on this topic and a framework to help them find a great property manager.
Managing your own home, as I have written, can be daunting and time-consuming in itself. Beyond just the aspects of managing this additional property is the nuances of the landlord/tenant relationship, which not everyone wants to take on. Depending on the property, your personality and your time constraints, outsourcing this management can be a great or necessary option. Today, Tony is answering all of our property management questions, from how to find a property manager, to what they do, and how to make sure you find a good one.
About Anthony Schmitt
Anthony Schmitt is the Broker & Owner of Golden Pacific Real Estate, a family-owned Property Management and Real Estate company located in San Marcos, CA. He lives with his wife Allison and newborn son Clayton in Rancho Bernardo, an inland suburb of San Diego. Born and raised in North County San Diego, Anthony has been a licensed Realtor for 10 years and a Broker for 7 years. His experience ranges from starter homes to luxury estates and investment properties. Golden Pacific Real Estate currently manages 130+ homes, condos, and multi-unit properties throughout San Diego County.
So Tony, why, or at what time, should someone hire a rental property manager?
It is always a good idea to at least speak with a property manager if you own or plan to own rental real estate. This way, you can make sure your investments are being properly protected. The Rental Real Estate landscape is constantly changing. From rent control to service-animal rights, it is more important than ever to stay on top of your tenants and properties.
Where should someone look to find a rental property manager?
My best piece of advice is to find someone local and established. Speak with your local real estate broker or acquaintances that own investment properties themselves. Referrals will typically be for strong companies that have earned a reputation for treating their clients well. Do not simply use the internet or base your decision on a company’s website or pricing. Although websites such as Yelp! or Google Reviews can provide some guidance, remember that you will typically see more “bad” than “good” on the internet!
What should someone look for in a rental property manager?
The industry has recently become inundated with new companies attempting to capitalize on what has become a very popular investment strategy. Here are some questions I would ask potential candidates:
1. How long have you been in business?
I highly recommend looking at the experience of the Broker/Managers and how long they have been active in Property Management. Brokers that have been involved in real estate sales for 30 years, but rarely conduct property management business may not be an ideal fit.
2. How many employees do you have?
The size of the company will typically indicate the level of personal service you can expect. If you prefer communication with the Broker/Owner as opposed to a front office staff that has a high turnover rate, you may consider opting for a smaller company.
3. How many and what types of properties do you manage?
It’s important to find a company that is comfortable handling your specific type of investment property. If you own a single-family home, you might not be well-served by a company that specializes in large apartments or HOA management. The number of properties managed compared to the number of employees the company has will also be a good indicator of expected personalized service.
4. What do you charge in addition to the monthly Management Fee?
This question can potentially save you hundreds of dollars per year. Many companies try to add in “hidden fees” in order to increase their revenue outside of the standard monthly management Fee. Be sure to have them explain every potential cost, including lease renewal fees, maintenance mark up fees, inspection or site visit fees, and other administrative costs. This will help you better understand your expected return on investment.
Which activities do property managers take care of for the homes they manage?
Full-time property management typically includes (but is not limited to) the following items:
Preparation advice prior to marketing a home
Setting a market rental price
Marketing and advertising
Showings to potential tenants
Tenant screening
Lease preparation
Move-in inspection documents
Monthly accounting and owner distributions
Ongoing maintenance support for tenants
Coordinating repairs
Paying bills associated with the property
Year-end accounting
1099’s for easy tax preparation
What are the benefits of hiring a rental property manager vs. doing it on your own?
I like to call property managers the Tylenol for landlords. Our primary job is to make your headaches go away. Being a landlord can be a very strenuous job that most people who start investing in real estate don’t see coming. We strive to make real estate a truly “passive” investment for you, rather than another job to take up your valuable time. Most landlords learn this the hard way by spending years fixing toilets and taking tenant calls in the middle of the night before they realize the freedom that property managers truly offer.
What are the drawbacks of hiring a rental property manager?
The most common struggle for new landlords is conceding control. For many investors, this is the largest asset they own, and one they are incredibly proud of. This is especially true for someone who has managed the property for themselves in the past and hasn’t been exposed to the current laws and regulations involved in renting homes. If you find yourself wanting to call your property manager on a weekly basis for updates on everything the tenant is doing and how the property is looking, you may want to consider self-managing for the time being.
What are the hardest parts of being a property manager?
There are quite a few challenges we face as property managers on a day-to-day basis, but the hardest part for me is to enforce contracts or take action knowing that it will have an impact on a family’s life. The truth is that it’s incredibly expensive to live in San Diego and many tenants are dealing with issues that go far beyond a lease agreement. These may include a death in the family, job loss, divorce and many more. Many landlords don’t understand the lasting impact that communicating with tenants will potentially have.
How do you find good tenants for your properties?
First and foremost, we follow all State and Federal Fair Housing Laws to ensure the landlord is protected from any potential discrimination lawsuits. Basic screening includes credit history, employment history, income to rent ratios, as well as debt ratios. Beyond that, I personally meet with every tenant that applies to one of our properties. We don’t utilize automated showings or use inexperienced leasing agents. We want to make sure tenants understand that we are there for them as well, and can be trusted to take care of them during their stay. Even a good tenant can create problems if they don’t feel they are being treated fairly. A reciprocal relationship is essential to developing great tenants.
Why do you love being a property manager and real estate agent?
I love being able to make a difference in people’s lives. As a Real Estate Broker, I have the ability to impact the tenants that I place in our homes and make sure they love where they live. I am able to impact the owners that we serve by providing peace of mind in an area of their life that was previously an incredible challenge. And in sales, I’m able to help buyers and sellers accomplish their goals, start their families, begin new traditions, or move on to new adventures! It’s much more than selling Real Estate. For me, it’s about empowering, educating and assisting my clients while they chase their dreams.
If you would like to learn more about Anthony's business and how he helps manage his client’s investment properties, you can visit his website or contact him via phone or email.
Planning Within Reach, LLC (PWR) is a fee-only and fiduciary wealth management firm offering one-time comprehensive financial planning, ongoing impact-focused investment management and tax preparation services in San Diego and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.