An Investors Opinion What Do You Look For In A Denver Property Manager
Interviewer: All right. So, Chris, we are property managers. And we have an office in Centennial, which covers the Denver Metro area, one in Boulder and one in Fort Collins. And one of the things I like to ask clients is like, An Investors Opinion What Do You Look For In A Denver Property Manager? So I’m sure you get that question a lot. What is your answer to the people you’re talking to, to your audience?
Chris: So this might sound brutal, but this is how I think. I usually think lowest common denominator when it comes to any service, you know. So I hope this doesn’t come across the wrong way, but, like, who is least likely to make a big mistake on something I own? And I usually, oftentimes, use four-letter words, but since we’re on the internet, I’ll try to be polite. It’s like, great, who’s least likely to mess up an asset?
And from a very high-low standpoint, me. Probably I’m the highest likely person to do it. Even though I’m an agent, I know all the rules, I also know that, flash, I know what I don’t know, and there’s a lot more stuff out there, and that, man, I don’t want to deal with it myself. So that’s one reason why I don’t like to manage my own properties because I consider myself a liability managing my own properties. Because, remember, I do have my license, so I have a, you know, higher standard and, “Oh, you should have known better, since you’re an agent.”
Even before I was an agent, I decided I’m going to use a property manager because I didn’t like it. As I talked to property managers, my favorite first place was in Reno, Nevada. You know, my second test is, who actually returns phone calls and emails? Believe it or not, I called four property managers. The fourth one eventually called me back. Guess who got my business? The damn person that called me back. Yeah. So, I mean, that’s another something, hey, are people timely and responsive?
So I like to say, great, and I say, you know, “Who’s least likely to mess it up?” going back to that analogy. That’s why I like to give myself that equation because I don’t have the experience. I haven’t been trained in it. And I’m more along the lines of, like, I don’t care about a few bucks now, I care about a big mistake that could wipe me out. All cool if I lose $500 here and there. It kind of sucks but, like, I can handle it. A $500,000 lawsuit? That’s going to hurt me big time and hurt my family.
So I like property managers that have very well established systems and processes. Because I am a system and processes guy and I think it’s great when things were mapped out and there is step 1 to step 200 or whatever or how many checklists you guys have. I know for different parts of the year, you have your checklists. I like those because great, if that individual property manager has an emergency, or you know what, sometimes people will quit their jobs, you know, sometimes people just don’t perform. And I get that. I have no problems with that.
Great, well, then, if there was a checklist in place, you guys, as property managers, can somehow step in and not miss a beat. And yeah, occasionally, something will get messed up, but, like, whatever, that’s going to happen no matter what. So I like well established people that have systems in place. I’m not a big fan of…I have clients, “Oh, great, I found this, like, you know, discount property manager for $50 a month.” I’m like, “Okay, and you want to have them manage your $500,000 house?”
Like, I talked to a gentleman. He bought, like, a three-year-old, new-built, custom home somewhere in Broomfield for, like, $570,000. Not a great rental because the numbers just don’t make much sense on there. But what made me so interested in him as he then hired, like, an à la carte property manager that he was going to pay $50 or $90 a month to. So every time they answered the phone, it was a $25 charge. And so this guy lived up in the Foothills, and every time there is an issue at the property, broken screen door, just all that little stuff, he was driving down there to do it because he didn’t pay his property manager.
Well, that takes out the whole point of it. I want to invest, not run it. And so I want to have people run the investments for me. So people that actually respond to emails and phone calls. They don’t have to pick up right when I call, but great, get back to me within the same day or next business day. Because that means when there are issues, great, you’ll inform me and so will the tenants. Like I said, people with systems and processes and people who have built a business, not the one-man show, I like that type of structure.
Interviewer: Talk about the question you would ask to understand systems and processes. So let’s say you call a property manager. What is the question that you would ask?
Chris: I mean, I kind of start [inaudible 00:04:14] Just, “Hey, what’s the process? Hey, great.” I say, “I want to rent a property or I got this property want to rent. What’s the process you guys take me through?” Some iteration of that. I don’t ask to see it. But then, as we get further in the deal, I’m like, “Great, you know, what happens with this? You know, where’s your manual? How are things like this?” I just ask those very high-level questions. And then you can usually tell if they’ve got staff and systems and people in place.
Interviewer: Awesome. (An Investors Opinion What Do You Look For In A Denver Property Manager)
Chris: So I get a lot of people where they want to self-manage their properties, and I get that. I wanted to do that with my very first property I bought in Reno, Nevada, and that lasted for one year, until my tenant left. He left fine, but then trying to find a tenant and all that stuff, I hated. Again, it goes back to, if you want self-manage, great. Go into it with eyes wide open, though. Don’t just go into it saying, “Great. I’m going to save 8% a month or 8% a year, so I’m going to save $120 a month.”
I get that, but there are issues. There are liabilities. As we were talking before, you know, there are laws that you have to follow, everything from knowing, “Great. I don’t want pets.” Well, do most people know that service animals are not pets? I didn’t, and I’m very fortunate that that property manager years ago said, “No, no, no. You have to take them. They’re not pets.” I was like, “Oh, okay, that’s really good to know. Thank you.” You earned your $500 fee because you saved me, you know, maybe a $20,000 lawsuit or whatever it is.
So make sure, you know, you know those rules. And then, we’re in summertime now, so in the springtime, Colorado passed a handful of more tenant-friendly laws. Some I agree with, some I don’t. But regardless, they are having a higher duty for landlords. We have to go out there and manage our properties. Everything from, great, now if there are instances of bedbugs, you have 24 hours out there to get someone to respond. They changed all their application fee rules, which I can’t recite.
They changed, you know, how quickly you can start the eviction process and all that stuff. So like, these are rules that you want to know and make sure you follow. Because if you don’t, you know, worst-case scenario, you can get in trouble and pay some fines and potentially have a lawsuit. So that’s why I like to say, great, hire a professional. Because, you know, you wouldn’t do dental work on yourself. Most people don’t buy houses all themselves, unless they’re interested in that stuff.
If you’re just looking for a long-term investment, set yourself up to minimize issues in the long run. Because if you hold onto the property for 30 years, you’ll be wealthy. If you lose it in year three, you’re going to have a hard time. So I like property managers.