- Start your property manager hunt early – before you even buy a home. They can advise you on whether it would make a good rental or not.
- Interview multiple property managers when selecting
- Don’t manage it yourself. That is active income, not passive income. Budget for a manager now.
Okay – so I am an agent with StarPointe Realty. And they are also the #1 management company I would recommend. Am I biased? Maybe. But I do not work on the property management side of StarPointe. I make this recommendation because A) I see what they do behind the scenes (and it’s good stuff!), and B) I have my own rental with them, and am a happy customer myself!
Others that I have not had personal experience with but might recommend interviewing are:
Typical Fort Hood Rates
10% of collected rent is common (they get $0 when vacant), often with a 9% or 8% discount if you have multiple buildings listed with them. Some also charge 50% of the first month’s rent. Don’t forget to ask about EOY tax preparation fees or any maintenance upcharges.
Services to Ask About
In many areas of America like Austin, it is common practice to put rentals in the MLS so that local leasing agents can show the home and collect a commission (often an entire first month’s rent in places like Austin).
That is not the case in the Killeen and Fort Hood area, where I would guess fewer than 10% of rentals are input into our MLS.
What are the benefits of being in the MLS for property owners? Firstly, greater exposure – literally every agent member of Fort Hood can see your rentals. And secondly, the leads to the following benefit…
If your rental is in the MLS, that also likely means it is set up to be shown by agents. That means would-be-tenants are actually escorted during property showings, instead of a property manager exchanging keys in exchange for a copy of an ID. This helps ensure the security of your home.
Inputing properties into the MLS and having agents show them usually does cost more. Many of the property managers who charge half the first month’s rent often apply that amount to the MLS listing and agent compensation.
Does your manager just do move out inspections or do they do more regular inspections? Many property managers do annual, semi annual or even quarterly. That is a great value add to make sure your investment is being taken care of and that the tenants are abiding by the lease (e.g. no unauthorized pets, swapping air filters, etc.).
What to Expect as a Fort Hood Landlord
Read my article about the Fort Hood rental market and what you can expect as a landlord.
I Want to Manage It Myself
Please don’t. Unless property management is your full time business, I recommend against managing your own properties for many reasons.
- The point of rental property is to have passive income. If you are managing it yourself, that is not passive income. It is active income.
- Even if you manage it now, you presumably will have it with a property manager eventually. Budget for that now.
- Good property managers can be hard to find. It is better to start the search now, in case the first couple don’t work out. That way you’ve got a trusted company in place by the time you’re relying on that passive income.
- If you are an investor, property management isn’t your core competency. Investing is. Instead of spending 5 hours a week saving yourself $80, spend that 5 hours earning yourself $500+.
The Property Manager Rule
I have a rule when buying any property:
Don’t own a home that a quality property manager would decline to manage.
That’s right, property managers – especially good ones – refuse properties all the time. Some property managers in our area, for example, do not manage multi-families at all. Good ones are selective about which ones are going to be worth their time.
Why do I have this rule?
- it tells me a lot about the property and its rental potential if a local property manager refuses to manage it; and
- if I own a property that good property managers won’t manage, I have committed myself to being the property manager forever. That is active income, not passive income.
My point? Consult with a property manager BEFORE you buy a house – any house – that you think one day might be a rental.
Share your own Fort Hood property management experiences below!