Once, you have bought your first real estate property, it is time to take care of it. Real Estate investment requires you to manage the property in more hands-on fashion, especially when you're new to the business. Property management is the key to real estate investment business if you want maximum return on your investment.

It is strongly recommended that savvy investors should hire a property management company to manage their first property. Though it is an extra expense to hire a property management company, this will help you provide firsthand knowledge and insight into workings of the real estate profession. Usually a good professional property management company has all the tools and experience you need at the beginning of your business: number of years of experience, established accounting systems, and relationships with brokers, vendors, contractors, and other real estate professionals. You can learn from a property management company by following ways: 

• Supervising the manager 
• By reviewing the monthly accounts
• Going over expenditure requests 
• Preparing budgets 
• Negotiating with vendors 
• Renewing or getting new leases 

You can find good property management companies either through a broker or financing institutions. You can also find a lot of information on property management companies on the internet. You should always interview property management companies before you close on the property as you would need to have property management company as soon as you close on the property. You should hire a property management company you are most comfortable with. 

Like all real estate agreements or contracts the agreement or contract with the property management should be in writing. You should make sure the management company you have selected is bonded to major bonding, or surety, firm. This would be helpful in case, your rent money is stolen or lost. You should also make sure that your attorney reviews the property management contract before you sign it.

Usually, most real estate property management agreements have a 30day cancellation policy. In case you or your other partners for some reason are not satisfied with the performance on the new property management company, you can always fire them and get a substitute for them. To do so, you would need to give a notice, which is usually 30 days. The best way to avoid this situation is to always do your thorough research before hiring a management company. You should try to interview at least three or four local property management companies with strong background, or big national companies with local offices to select the one that meets your criteria. In the interview process, always ask the management companies for copies of accounting reports, sample leases, solicitation forms, vendor bid and proper checklists. You should also try to meet in-house leasing agents and should get details on the following: 

• Fees and operations 
• Monthly reports 
• Billings and collections 
• Leasing and tenant relations 
• Repairs, capital improvements, and replacements 
• Bonding and insurance 
• Marketing

 

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