There are literally thousands of management companies across Florida – several hundred of them in the Orlando area alone – so how do you find the right one amongst all that choice?

… and getting the right one is important as there are many companies appearing and disappearing every week (sometimes with money belonging to both tenants and owners) and a massive variety in the range of services and service levels offered.

BEFORE YOU START

The first thing is to make some decisions about what you need and want out of the relationship.

RENTAL OPTIONS
Consider what type of rental you are aiming for – each has its advantages and disadvatages and will have a bearing on the type of management company – and the range of services – you require.

Long Term Rentals
Long term rentals are usually for a year at a time. There are some advantages to long term rentals:

• Property can be let unfurnished
• 100% occupancy for long periods
• Less admin to worry about
  

On the other hand, a long term rental means you cannot use the property yourself – except between annual tenancies – and the rent levels are significantly lower for longer lets.

The management company you select for this type of rental really only needs to find you tenants – you could use them on a reduced contract, or a separate local service company, to carry out maintenance and small repairs.

Short Term Rentals
The definition of short term rental in zoning restrictions is from a period of one day upwards. You can rent for any period longer than this – so you can promote a property for short term rental and still accept a long term rental if it comes along and the arrangement suits you.

For short term rentals you will need a much more involved management company with a wide range of services to ensure they can deal with everything you and your tenants need handled 24 hours a day, seven days a week.

WHO DOES WHAT?
The next major question is to decide just how much time and effort you are willing and able to spend on managing your property. It’s unlikely that it will be practical for you to get involved in the day-to-day or inter-let management, but there are some areas you might do yourself.

The main activity that many owners want to be more involved in is the process of marketing the property and finding tenants. This can be quite practical if you are marketing to UK holiday makers for example, as you are clearly in a good position to deal with UK advertising from home. The increasing use of the Internet can make it quite cost effective to promote a property through multiple sites.

On the other hand, you have to be aware of the competition, and many holiday makers find their holiday homes through companies who can offer them a wide selection of different properties to choose from, and it may be difficult for you as an individual to get your one property noticed against this kind of marketing budget.

Management companies are likely to marketing a large number of properties, so you get the benefits of the economies of scale and co-operative marketing – which means that they may get an enquiry that is initially for a property that turns out to be unsuitable or unavailable, and go on to convert that into a booking for you.

CHOOSING A MANAGEMENT COMPANY

I’ll go on to look at just what services companies might offer – and obviously it’s important you find a company who offers the services you need at a fair price. However, with the large number of companies involved and the occasional horror stories that we hear from this sector, there are some general checks you should do to establish that a property management company is worth even thinking about doing business with.

• Experience. It is perhaps unfair to dismiss new companies lightly – after all, everyone has to start somewhere – but dealing with a new management company can be very risky.
  
  It is not very difficult or expensive to set up a business of this type – making it a popular vehicle for people trying to get work or investor visas to the USA. This low barrier to entry also means that many companies set up without being fully funded or with a complete understanding of everything the business entails. This all leads in turn to a high turnover in management companies popping up and then soon after going out of business.
  
  Your management company will have access to an extremely valuable asset and probably significant amounts of cash that belong to you – this is not an area to take a risk in!
  
  
• Performance. There are a number of annual owner surveys published in the specialist press that report on the performance of management companies in Florida. This is an invaluable way to see what other owners have experienced.
  
  
• Background. You should confirm the status and credentials of a potential business partner like a management company with the local Better Business Bureau, Chamber of Commerce, Sheriff’s office and any appropriate licensing authorities for the area. An Internet search for “company name +problems” can sometimes throw up interesting material – though you have to remember with such personal anecdotes that there are always two sides to every story.
  
  
• Independence. Watch out for management companies that are tied to developers or real estate companies. They may well have conflicting loyalties and there are stories of such partnerships working in collusion to use client’s properties to provide free accommodation for new customer buying trips.
  
  
• Recommendation. If you have (as advised) been dealing with sales agents, mortgage brokers and so on who have specific experience of UK citizens buying property to rent out in Florida, it is likely that they can give some well-informed
  recommendations. Ideally, they will give you several companies to put on your shortlist based on feedback from other owners, so you can be sure they have an arms-length relationship with the companies and have no vested interest in you signing up with any one in particular.
  
  
• References. Always ask for references and always follow them up.
  
  

PROPERTY MANAGEMENT SERVICES

Although individual companies may only offer specific services, or package them up into different service levels with catchy names, if you put them all together you will see there is a massively wide range of different services available for the property owner to choose from – and many companies will effectively offer you a menu to choose from so you can agree your own custom package.

Some of these services are more applicable to short-term rentals or long-term rentals, but in all cases remember – you are the customer here, and you should make sure you get the services you want … and that you don’t pay for services you don’t want.

Below, I list the main headings for property management services, along with the kinds of services you should discuss with potential partners:

• Find tenants. Promote your property through various media, carry out checks on potential tenants, manage the move-in and move-out cycle.
  
  
• Collect rent. Take payments reliably, collect debts, guarantee tenancy/payments/income, manage tenant security deposits.
  
  
• Day-to-day maintenance and repairs.Encourage tenant care, manage third party services, provide in-house services, operate within agreed limits.
  
  
• Inspect and report. Carry out move in/ out inspections, document/photograph/video inspections, provide maintenance and repair reports.
  
  
• Accounting. Provide monthly statements, quarterly/annual summaries, tax reporting, provide access to owner account, operate escrow or trust accounts, make payments on owner’s behalf.
  
  
• Handle problems and emergencies. Provide tenant support services in person/online/telephone, manage and report on incidents.
  
  

PROPERTY MANAGEMENT COSTS

While I appreciate it would be useful to give an indication of costs for property management services here, the truth is that there are so many variables that it is impossible to give a meaningful figure – even as a percentage of rental income.

One thing you can be sure of is that the Florida property management market is a very crowded and competitive one, so there is massive pressure on companies to improve efficiency and service levels while competing on price. The kind of percentage you might pay a company simply for referrals and booking services on a villa in another part of the world can get you a nice little portfolio of management services in Florida.

Clearly, the system works for thousands of rental property owners – and it will work for you if you do your homework and ensure you get exactly the right service package for your situation.