Little did she know, however, that the “mom and pop shop” running her triplex was charging tenants $950 per month – even though rent only amounted to $890.
Looking back, Broad is not only dismayed by the scam, but she struggles with the fact that it may have continued for some time if she hadn’t moved into the house and started collecting rent on her own. As a result, she imparts several strategies to catch fraudsters before they can do any damage to an investor’s reputation and credibility.
- Asking around. “Ideally, these would be investors in your area,” Broad said. “Ask: how long have you worked with them, why, what do you like and what don’t you like. If everyone keeps mentioning the same company, definitely call them.”
- Conducting research. This not only involves an online search for complaints and negative reviews, but some investigative work as well. “Ask if they offer other services other than property management, and ask it that way, almost like you’re looking for them to offer other services,” she said. “In my opinion, you only want them to be property managers. If they have a maintenance company, how can you trust that when they say work needs to be done, they’re saying that because work really does need to be done or because they need to boost their revenue on the property side?”
- Obtain references. “Ask for the address of some the properties they manage and find some listings on their website, then do drive-bys to see what kind of conditions they’re in and what kind of properties they are.” She also encourages investors to request names of clients and call them for a full evaluation.
Finally, Broad emphasizes that these tips are necessary for all investors – even those who may think they prefer managing their own properties.
“Life changes, and even if you manage your own properties today, you might move away, your job might get more intense, or something might happen where you can no longer do it,” she said. “It’s a good idea to always be in contact with a local property management company just in case you need them.”
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate
Investment Hot Spots:
Oakville, River Glade, Musgrave Harbour, Wynndel, Ashfield-Colborne-Wawanosh
Julie Broad, a noted author and industry veteran, thought she hit the jackpot when she found a Toronto-based property manager who only charged 5% of the rent and didn’t expense any fees for acquiring new tenants, outside of advertising costs.