As a rental property owner, your first instinct is to use a hands-on approach. You want to manage all your assets with your very own teams. But as your portfolio grows, that ambition may become a bit less feasible.

As such, many owners decide to outsource to third-party management firms. All third-party management firms, however, aren't created equal. That puts the onus on owners to find one that exhibits a professional approach, maximizes efficiencies, drives NOI and properly navigates the laws and regulations surrounding the rental-housing industry.

So, what are the primary components of a high-performing third-party management firm? Let's take a look:

Communication and responsiveness
Thriving third-party management firms are confident in their processes and want owners to breathe easy, knowing their asset is in capable hands. That said, a steady stream of communication should still exist. From communicating opportunities for enhancing revenue, the need for any significant repairs or upgrades to the property, notable incidents onsite or any other items of concern, third-party teams should be quick to reach out to owners.

Likewise, timely responsiveness to any correspondence from the owner or key shareholders is paramount. Few things are more frustrating to an owner than reaching out to a third-party team and waiting days for a response.

Efficient operations led by stable, high-functioning teams
Skilled, high-performing teams are the hallmark of prosperous third-party management organizations. The ability to hire and develop strong and committed teams generally is a key indicator for overall success, as it leads to better relations with residents, increased efficiencies and less employee turnover.

High turnover is one of the industry's primary challenges, and when it happens it causes additional burdens on other team members. That can lead to burnout—and subsequently more turnover. Owners certainly aren't envisioning a revolving door of associates from their third-party outlets and might opt to move on if turnover becomes too prominent. That is why property management firms that have a robust culture in place—and provide opportunities for their associates to grow—are increasingly more attractive to property owners.

Transparency
Keeping owners in the loop is paramount. Whether it's updated local policies, a morphing local market or minor onsite issues that property management teams believe they can handle on their own, it's always best to share the details with the ownership group. They will appreciate the transparency, which ultimately could go a long way toward maintaining the partnership. It will also ensure it's not a shock to ownership if any of the minor issues or concerns become more pronounced. 

Treat the asset as your own
The best third-party management organizations don't see a difference between operating their own asset or that of another owner. They approach each with the same dedication and commitment and have the same key performance indicator targets for each. Granted, approaches must vary when it comes to certain aspects, such as accommodating requests from owners to change to a certain software or move to a different supplier partner. But in the big picture, third-party teams should manage the asset as if it's their own. Part of that approach involves not skimping on resources or tools that will help the property operate at a high level.

As such, ownership groups should remain astute when hiring property management teams, as low-cost providers might not have the resources to attract and retain top-tier talent or properly maintain the property. Finding a firm with a proven track record, the ability to maintain talent and resources—and one that is aligned in executing the owner's strategy—will ensure ownership groups can rest easy, knowing the property is in capable hands.