Many people are becoming interested in real estate these days, and you may be one of them. You may own numerous homes, apartment buildings, or commercial properties. When you first start acquiring properties, property management may not seem that difficult. However, the more properties you purchase and the more tenants you have to work with may make it increasingly difficult to keep track of your assets. Trying to manage your own properties could result in tenants paying rent late or overstepping the lease terms. Having an excellent property management company act as landlords over your property will allow you to focus more on acquiring and investing in real estate.
If you are a die-hard DIYer, it may be hard to come to terms with letting a third party take over. But investing in one of the best property management companies will be well worth it in the end. Even though an excellent property management company may be pricey, it will prevent stress, legal troubles, and losing money and time. And some tax deductions can help ease the costs.
How do you go about hiring the best property management company for your properties? This guide looks at some of the best property management companies and provides some tips on how you can adequately vet them.
- BEST OVERALL: Greystar
- RUNNER-UP: Cushman & Wakefield
- BEST SUPPORT FOR OWNERS: Lincoln Property Company
- BEST SUSTAINABLE SOLUTIONS: WinnCompanies
- BEST RESIDENT SUPPORT: BH Management Services
What to Consider When Choosing One of the Best Property Management Companies
It’s essential to remember that the more properties and tenants an owner has, the more complicated matters can get. Appliances and plumbing may need fixing, contracts need review, and tenants are moving in and out. If your primary focus is developing a real estate company, you may not have the time to devote to dealing with tenants and contractors. Here are the main factors to consider when choosing between property management companies.
Residential vs. Commercial Management
Different property management companies may have different focuses. Usually, a company will focus either on residential or commercial property management. Others may accommodate both but have separate divisions within the company. It’s a good idea to know which type of property management company to work with for your properties. For example, if most of your properties are retail spaces, restaurants, or apartment complexes, you may want to hire a property management company that specializes in commercial property management. On the other hand, if you own several homes or multifamily properties, then it’s a good idea to hire a company that specializes in residential property management.
NMHC stands for National Multifamily Housing Council, and it’s the leading organization in the apartment industry. Annually, it ranks the nation’s top apartment managers, owners, and developers. Ranking on this list is honorable because NMHC chooses the best property managers based on thorough research and various criteria, including the number of units managed and regions of operation. It also considers the housing unit breakdown into market units, student housing, and senior housing. While a company’s ranking is not the be-all-end-all, it’s an essential factor to consider when choosing a property management company. NMHC-ranked companies are reputable and have been vetted to meet specific industry standards.
Another vital thing to consider is what states the property management company operates in before working with one. Suppose an owner’s property is in Florida, but a company does not already manage properties there. In that case, it may not be the top choice to hire since it’s not established in the area and may not know the location. A company that already does business where your property is located will know the area and will be able to market effectively and anticipate a location’s quirks, like weather changes or rental trends.
When narrowing down which property management company to choose, an owner should fully understand what the company is offering. An owner should determine their needs and express them to the companies under consideration.
While an owner hires a property management company to manage an asset, the owner is ultimately responsible for their property and tenants. So it’s paramount for an owner to hire a property manager they trust. A reputable property management company should make timely repairs, keep accurate records, and protect a property from damage or loss. An owner should also determine what a company’s communication standards are. How often will a company give updates? Will an owner have to reach out to the company, or will the company proactively reach out to the owner?
Something else to keep in mind is whether the company provides beneficial resources to tenants, like 24/7 emergency maintenance or other amenities. Happy, cooperative tenants who want to remain in a property are a tremendous advantage for owners and property managers.
Number of Units and Properties
While the number of years a company has been in business can seem like an important factor to consider, the number of units a company manages can be more pertinent. The number of units a company operates is a helpful indicator of its scale and success. A strong portfolio with many units under management may indicate that the company has eliminated useless business practices and knows how to appeal to a broader range of tenants.
Years in Business
Sometimes the longest in business doesn’t always mean the best in business. However, there is some benefit to hiring a company that has been in business for more than a few years. The longer a company has been in business, the more likely it is that it has encountered and successfully managed various properties and issues that may arise at those properties. Researching a company’s history and going through reviews and resources can put an owner at ease and make them feel more confident in their decision. This is especially important if an owner hires a company to manage a property in a different state than where the owner lives.
Our Top Picks
When business starts booming, an owner may not have the time or energy to act as the property manager. Here are some of the best property management companies to help real estate owners and investors focus on growth and expansion and stop sweating the small stuff.
Why It Made the Cut: Greystar is a leader in multifamily property management, with over half a million units managed in the United States.
Despite being one of the youngest members of the property management community, Greystar has stormed the scene and become an all-star in this industry. With over 660,000 units managed, the company is poised to reach over a million and possibly segue into all states within the U.S. Its current success can be attributed to its enormous devotion to investing in its properties and using beautiful, comprehensive listings to attract top-notch residents for its communities. In addition, it caters to a variety of residential clients, including seniors and students. Greystar is one of the world’s largest multifamily and commercial real estate firms and manages over $32 billion in assets.
One drawback seems to be a website that isn’t as user-friendly as it could be. However, property owners can rest assured that Greystar works to attract the best residents and continually invest in and improve properties, making it an excellent partnership option.
- NMHC ranking: #1
- Property locations: 45 states and Washington, D.C.
- Services: Operations, IT, marketing, procurement, construction management
- Units managed as of 2022: 669,137
- Years in business: 28 years
- More substantial investment in each property than the competition
- Thorough, up-to-date, and attractive apartment listings to attract more potential residents
- Portfolio with a wide array of properties, including student housing and over-55 communities
- Somewhat user-unfriendly website design
Why It Made the Cut: With over a century of experience in residential, commercial, and mixed-use property management, Cushman & Wakefield stays abreast of what is innovative in the world of real estate so that its clients can also.
One of the longest-established property management companies in the U.S., Cushman & Wakefield has over 100 years of experience attracting top-notch clients for its customers’ properties. Based in Dallas, Texas, this property management guru invests heavily in recruiting high-quality personnel who, in turn, attract the best residents using state-of-the-art, innovative technology like AI modeling and advanced workflow techniques. Cushman & Wakefield manages over 170,000 units, including high-rise, upscale, mixed-use, new development, affordable, and value-add properties.
Not only does Cushman & Wakefield strive to improve the communities for residents, but its team is also devoted to improving the surrounding communities. It’s making a substantial social impact through the charities its employees volunteer and raise money for. Unfortunately, while the company’s commitment to innovation and technology is commendable, few resources are available online for residents. Cushman & Wakefield’s knowledge of local markets allows it to tailor marketing to the types of residents it wants to attract to maximize profits for property owners.
- NMHC ranking: #3
- Property locations: 32 states and Washington, D.C.
- Services: Accounting, financial reporting, marketing, construction management, sustainability services
- Units managed as of 2022: 171,713
- Years in business: 104 years
- Enhanced experience through unique and advanced property management technological tools and solutions
- Philanthropy initiatives improve surrounding communities
- Owners and residents can save on utility expenses through energy initiatives
- Few resources for residents
Why It Made the Cut: Lincoln Property Company is a powerhouse leader in property management that is leading by example and attracting clients to its diverse line of business, including property management, investment, advisory, real estate consulting, and more.
Lincoln Property Company is based in Dallas, Texas, but it has satellite offices across the country, which provide owners with more effective management and quicker issue resolution. While residential communities are a huge part of Lincoln’s business, it has expanded its portfolio to include commercial real estate. The company is Service Organization Controls (SOC) certified, meaning that a third party evaluates its standards and reports for transparency and legitimacy.
Lincoln Property Company is dedicated to client and tenant satisfaction. It works with each owner to develop a personalized management plan to preserve capital and maximize value. Its staff also receives in-depth training on radon, asbestos, lead, and mold, maintaining safety for residents and value for owners. While Lincoln is hands-on with owners, a drawback is that it doesn’t have many online resources for residents. Besides this disadvantage, the company is a solid, respected choice in the industry.
- NMHC ranking: #2
- Property locations: 34 states and Washington, D.C.
- Services: Marketing, accounting, procurement, revenue management, business software, IT
- Units managed as of 2022: 210,183
- Years in business: 56 years
- Service Organization Controls (SOC) compliant to meet management, accounting, and IT standards
- Regional and satellite offices allow for more involved engagement and quicker resolutions
- All on-site personnel receive thorough training on radon, asbestos, lead, and mold
- Few resources for residents
Why It Made the Cut: WinnCompanies is an experienced leader in property management known for its sustainability efforts that benefit owners and tenants.
WinnCompanies has amassed over 100,000 units, including affordable housing and converted historic structures. These “deep energy retrofits” aim to make older facilities more energy efficient, helping to preserve an area’s charm and uniqueness without making owners and tenants pay more on their energy bills. WinnCompanies has an overall dedication to sustainability and follows best practices outlined by organizations like the U.S. Green Building Council and Enterprise Green Communities, aiming to make its buildings LEED certified.
Unfortunately, sustainability initiatives often mean higher initial bills, and new property owners may not benefit from these energy-saving initiatives from the get-go. Although this is a minor setback, WinnCompanies’ track record for developing $3 billion of real estate and dedication to excellence makes it an excellent partnership option for property owners.
- NMHC ranking: #6
- Property locations: 22 states and Washington, D.C.
- Services: Management consulting, asset management, sustainability initiatives, construction management, joint venture opportunities
- Units managed as of 2022: 101,233
- Years in business: 50 years
- Buildings follow certification best practices outlined by the U.S. Green Building Council and Enterprise Green Communities
- “Deep energy retrofits” aim to revive older buildings to make them more energy efficient
- Energy-saving initiatives can help owners and residents save on utility expenses
- Energy-efficient strategies may not be as cost-effective for new property owners
Why It Made the Cut: BH Management Services has achieved remarkable growth in a relatively short time by investing in a high-performance property management team that delivers outstanding resident support.
For nearly 30 years, BH Management has amassed an impressive portfolio of over 100,000 properties, including student housing. Headquartered in Des Moines, Iowa, this property management company has developed a presence in 26 states. It provides comprehensive and appealing property listings that attract high-quality residents. To make life easier for its many residents, the company offers a resident portal, online payments, maintenance requests online, and online applications for newcomers. It even provides unique wellness offerings at properties to improve residents’ physical and mental well-being.
Like other best multifamily management companies, BH Management Services understands the markets in which it operates and works hard to achieve high occupancy and low turnover. However, while it offers great resources to residents, especially online, the resources for property owners are minimal. Despite this, property owners can rest assured that their tenants will receive quality attention and dedicated service.
- NMHC ranking: #9
- Property locations: 26 states
- Services: Accounting, operations, marketing, training, IT
- Units managed as of 2022: 101,177
- Years in business: 28 years
- Thorough, up-to-date, and attractive apartment listings to attract more potential residents
- Comprehensive, extensive, and easy-to-access resources for residents, including online payment and maintenance requests
- Curated on-site wellness offerings promote residents’ mental and physical well-being
After scrutinizing several of the best property management companies in the United States, we decided that the best overall is Greystar because of its nationwide operation, the number of units managed, substantial investment in its properties, and its top NMHC rank. The runner-up, Cushman & Wakefield, operates in more than half the states in the United States and has many years of experience in the property management industry, along with its commitment to the surrounding communities in which it operates.
How We Chose the Best Property Management Companies
We considered companies within the top 10 on the NMHC ranking. These five companies stood out for their longevity, services, and impressive portfolios that cater to diverse populations. Their growth trajectories in the U.S. and worldwide also seem promising. These are full-service companies, and each has an innovative feature or approach others in the field cannot replicate.
Before You Hire One of the Best Property Management Companies
Hiring one of the best property management companies is not an easy task. There are many factors to consider, especially their costs. However, their fees shouldn’t be the only factor you consider. Consider their reputation and what reviews say about them. If possible, focus on reviews from owners with similar properties. When it comes to hiring the right property management company, it pays to ask some tough questions for each of your prospects; this has the potential to be a long-term partnership. Therefore, it’s important to choose the best option for your real estate business so that you don’t have to waste time ending a contract and starting another with a new company or performing tasks that you thought the company would do for you.
Cost of Hiring One of the Best Property Management Companies
When hiring a property management company, one of the highest costs to consider is the percentage of monthly rent fees it will charge. On average, property management companies charge between 8 and 12 percent of the monthly rent collected on residential properties. So, if one of your properties rents for $1,000 per month and the fee is 10 percent, a property management company would collect $100 on that property per month. Property management companies will charge this percentage on all properties they manage for you. With commercial properties, the fees may be between 4 and 12 percent.
Although the percentage of monthly rent is one of the most significant amounts of money property management companies will charge, they could also charge other fees, including contract setup fees, overseeing vacant property fees, and maintenance fees. They could even charge a miscellaneous fee to serve as a reserve fund to pay things like property taxes, insurance, and more. If problems arise with property lines, the property management company can act on the owner’s behalf. If a land survey needs to be done to determine the property’s boundaries, the owner may be charged. When hiring one of the best property management companies, discuss the costs and potential charges up front.
The Advantages of Using One of the Best Property Management Companies
Working with one of the best property management companies has many advantages. Most property management companies should maximize profits on a property, assist tenants with maintenance needs, and ensure that proper eviction protocols are followed. However, the best property management companies go the extra mile to perform these tasks as effectively as possible and maintain your preferred level of communication. Working with the best should be a seamless process, and an owner shouldn’t have to deal with any tenant problems or concerns. Here are a few other key advantages of hiring a property management company:
- Vacancies are filled
- Rent is paid promptly
- Maintenance requests are handled
- Services like accounting and marketing are offered
- Owners have more freedom to focus on other matters
Choosing the best property management company isn’t always easy. However, being informed can help property owners make better decisions when selecting candidates. Here are some of the most frequently asked questions related to property management.
Q. How does a property management company operate?
Property owners hire management companies to take on the day-to-day activities of maintaining rental properties. Property management companies are a liaison between the property owner and the tenants. They qualify tenants to live on the property and ensure tenants pay rents on time, receive proper maintenance, and follow protocol for evictions when necessary.
Q. How is a property management firm usually paid?
A property management firm typically receives a percentage of the monthly rents collected, often between 8 and 12 percent.
Q. What percentage of revenue do property management companies take?
A property management company typically takes between 8 and 12 percent of the monthly rent collected.
Q. What is a property manager’s first responsibility to the owner?
While a property manager has many responsibilities, the first responsibility is to maximize profit for the owner.
Q. What skills does a property manager need?
While property managers don’t have to have certifications or licenses, it is good to have experience in the industry, experience with lease agreements, budget management, and vendor management. Some other essential skills include customer service, collections, communications, and computer skills.
Q. What is the most challenging part of property management?
One of the most challenging parts of property management has been and likely will continue to be attracting and retaining quality tenants.