For many Americans, owning rental property is a great investment, distinguished by regular profits and greater stability than the stock market. To manage this investment, property owners typically either perform rental management services by themselves or hire residential property management companies to take care of maintenance, repairs and other tasks. Because of this, recent research indicates that the property companies that make up this industry are steadily changing, with smaller businesses growing or being replaced by much larger firms. But is this trend good or bad for property owners?
The answer to that question seems to depend on the property management company in question, as well as the location: in New York City, for example, the industry seems to have been taken over by firms like FirstService Residential, which has 400 employees managing more than 500 properties, making it the largest property management company in the city. A subsidiary of the Toronto-based FirstService Corporation, FirstService Residential offers residential property management services in 21 states and employs more than 12,000 people in total, a fact that often helps its clients: for example, the company’s size has allowed it to operate FS Energy, an energy advisory program that has helped the business reduce its carbon footprint by almost 16%. This translates into more than $23 million in savings for its clients.
Companies like FirstService also have the resources to develop elaborate infrastructures dedicated to financial management, compliance, closings, human resources, training and education. But while these firms insist that they offer a quality of service smaller operations can’t match, small-and-medium sized residential property management companies are still holding their own. This is true even in New York City, where some property owners still prefer the personal touch of firms with relatively few properties in their portfolios.
According to companies like the MD2 Property Group, which currently manages two properties, these clients prefer the personal touch their firm offers. While bigger companies can make it difficult to know who to contact in various situations, smaller companies help facilitate successful relationships between property owners and their rental property managers.
In the end, however, size isn’t the determining quality of a reliable residential property management company: instead, it is about the strength of the office backing the property managers and the decisions that either help or hinder their clients. To find the right property management company, property owners must consider a variety of details to determine if a company is right for their needs, a decision that may or may not reflect on the number of properties in their portfolio, number of employees or size of their market. Research more like this.