To Pick The Perfect Property Manager.
1. HOW DO YOU MARKET MY PROPERTY?
Marketing brings awareness of your property to potential renters. How a property management company markets their units will clue you into the urgency (or lack of urgency) at which it occupies vacant property. For example, some companies will leave listings off of MLS to avoid sales competition, even if listing them could rent your property sooner. Instead, they use their own sites, Zillow, or Craigslist to keep the sale in-house. Make sure your property is listed on the MLS and ask to see the link!
2. HOW DO YOU SCREEN TENANTS?
Tenant screening is the single most important part of this entire process. Who you put in the home is crucial! The horror stories you’ve heard about destroyed properties, not paying rent on time, and calling with frivolous repairs all stem from the tenant. Be sure your management company is verifying two years rental, two years employment, nationwide criminal search, credit check and tradeline checks. You should feel comfortable with the process your property management company utilizes to screen potential applications. Ask what systems they use for background and credit checks and the criteria for acceptances and declines.
3. HOW CLOSE IS YOUR OFFICE TO MY PROPERTY?
Doing business with a company that has an office near your property will give
you peace of mind. You need a manager that will respond to your needs without
delay. If your property’s location isn’t in close proximity to their office, your
manager may be less responsive – especially at 4:30 p.m. on a Friday
afternoon. Ensure you find someone that’s willing to check in on issues even
when it’s inconvenient.
4. DO YOU UP-CHARGE ON REPAIRS?
Starting rates advertised by property management companies may look
enticing, but you should be weary. A closer look through additional fees
will give you an entire picture of the management expense. Charges for repairs is one specific area that deserves your attention. Find out a company’s fee for coordinating repairs at your property. Do they up-charge a flat fee for repairs? Or do they take a percentage of the cost of each repair?
5. DO YOU CHARGE ME WHEN THE PROPERTY IS VACANT?
Ask whether the property management company charges you a fee if your
property is vacant or when the tenant isn’t paying rent. If managers are still
collecting your fee even when your property isn’t generating income, they
may be less inclined to be aggressive with marketing or eviction efforts.
6. ARE THERE ANY OTHER CHARGES BESIDES LEASING, RENEWAL, AND MANAGEMENT?
When in doubt, don’t beat around the bush. Ask property managers to
go through their entire fee structure with you before you make a decision.
Be sure you’ve located all hidden fees before making an agreement. Never feel pressured to sign a contract before you understand exactly what you’re signing.
7. HOW MANY UNITS ARE UNDER MANAGEMENT?
A number of units a company manages shows their workload and gives
you an idea of how long they’ve been in business. Companies that manage too
many units with a small staff are likely to have strains on their customer service.
Additionally, when a company manages too few properties it may be a sign
they’re newly established or don’t have the processes or priorities in place to
effectively manage volume. In both cases, this question can segue into a
conversation about their operations and experience level.
8. HOW MANY PEOPLE ARE ON YOUR TEAM?
Ask for the ratio of property managers to properties when choosing a
management provider. A good property manager can oversee about 100
properties when management is their main priority. Managers who wear multiple hats including accountant or leasing agent are spread too thin. Pressing questions about your repairs needed at your property may take a backseat to their other priorities when they have several responsibilities. For this reason, find a company with a team of people who handle the administrative tasks on the backend.
9. WHEN WILL THE OWNER/LANDLORD GET PAID AND HOW?
Ensure there’s a standard method of payment each month for your rental
income. After all, you want to get paid on time for the investment you’re making in their service. Ask prospective companies when the funds are dispersed, how you’ll receive it, and if there’s a fee. Ideally, funds should be transferred by the 10th of each month, electronically by ACH, and at no charge
10. WHAT ORGANIZATIONS ARE YOU PART OF AND WHAT TRAINING HAVE YOU HAD?
When shopping property management companies, find out if they’re members
of an organization or association. Group memberships include continuous training opportunities which speak to a company’s reputation and dedication to keeping up with industry advancements. Their membership also makes it easy for you to do research on their service track record. Some associations you can reference or are a part of the Better Business Bureau.
11. WHAT IS YOUR AVERAGE NUMBER OF DAYS ON THE MARKET?
Asking about the average amount of days their units stay on the market shows you how fast they find qualified renters and their overall marketing abilities. An average over 21 days is a red flag, especially if they’re charging you fees while your units lie vacant.Managers that go unpaid during periods of vacancy
have a sense of urgency to resolve issues that are holding the property back from being leased.
12. IF YOU’RE A FRANCHISE, HOW LONG HAVE YOU BEEN IN THE
INDUSTRY BEFORE THE FRANCHISE?
Whether a property manager has a history in the industry before franchising
is an important question that will help you understand their experience.
Anyone can buy into a franchise, so you should still inquire about the specific
background of the franchise owner. They may have the franchise systems
and reporting in place, but without the right knowledge, that franchise owner
may not be able to do the job properly.
13. WILL I BE LOCKED INTO A CONTRACT?
Be wary of contractual agreements thatlock you in regardless of the property
management company’s performance. Youshould have options to end the relationshipif you become unhappy with the service. Ask what that termination fees are and what contract service guarantees they have that hold them accountable.
14. DO YOU HAVE INSURANCE?
Never hire a property management company without insurance. If a
company working on your behalf doesn’t have coverage for things like errors
and omissions when a mistake is made, you’re unprotected. Request details on
their insurance policies and review them thoroughly before committing to an agreement.
15. WHO IS MY POINT OF CONTACT AND WHAT’S YOUR RESPONSE POLICY?
Emergencies don’t wait for office hours and neither should your property
manager in terms of their response. Ask for their on-call response policy and a
list of departments you can reach out to for various issues. Find out if you’ll
have a specific person dedicated to your property and how messages are
delivered throughout their office.
16. DO YOU FOCUS SOLELY ON PROPERTY MANAGEMENT?
A real estate agent moonlighting as a property manager is hit or miss.
Typically, they’ll be less inclined to take care of urgent matters quickly
if they’re in the middle of a showing with a large commission attached. Hire
someone who’s completely focused on your property and not doing unrelated
business that will interfere with your property’s success.
17. HOW WILL YOU KEEP ME UP TO DATE ON MY PROPERTY?
Owners should be continually informed about the status of their property
without having to constantly track down their manager. Setting expectations for
how often you’ll receive updates will alleviate the frustration of phone tag and
miscommunication. Find out their weekly and monthly protocol on communication for events like property showings, inspections, and expense reporting.
18. HOW DO I KNOW I’M GETTING THE BEST DEAL ON MAINTENANCE?
We briefly discussed property management maintenance questions.
Now, take your investigation process one step further and ask whether the
management company does repairs inhouse or if it’s outsourced.
If they provide in-house maintenancefind out their procedures for reportingthe
legitimacy of the work they perform. And if an outside contractoris used ask
about the company’smaintenance bidding process andif you’re at liberty to accept or reject bids. Finally, ask who coversmaintenance expenses due to tenantnegligence. You don’t want to incurlarge maintenance bills for
damageoutside of your control. If the property management company
doesn’t allow you to use a vendor that you trust and have used in the past, be
cautious about moving forward.
19. HOW DOES YOUR EVICTION PROCESS WORK?
You should understand the full cycle of eviction, starting from how the resident
is notified of the first late rent payment. Since an eviction can result in the loss
of possession or rental income for 3045 days, you need to trust that your
management company will do everything in its power to get your property back up and running.
20. IF YOU’RE A FRANCHISE, ARE YOUR MARKETING AND BUSINESS STATS BASED ON YOUR INDIVIDUAL BUSINESS OR THE ENTIRE FRANCHISE?
When a company franchises the business model has proven success, but that doesn’t mean the person who buys into the franchise can produce the same results. Instead of being sold on franchise-wide business stats, focus on the productivity of an individual branch. Question how long they’ve been in
business, how much they’ve leased in the last year, and how many units they
manage. When retrieving information stay locally specific; statistics from
another person in another state will bring no value to you and your property.