Believe it or not selecting the right property manager is one of the hardest decisions you’ll ever have to make. Why you might ask? Well, let’s be candid here, as investors we all have a bit of issues with control and well, letting go.
So if you’ve finally realized that you’re willing to let go, you need to align yourself with a property manager that will make your life easier.
Here are just a few of the questions you should be asking property managers as you interview them:
1.How long has the property management company been in business?
Many real estate agents are starting property management companies because home sales are slow. You want a company that specializes in property management and leasing and has a long track record. Don’t fall for the line “our office has many years COMBINED experience.” 20 years “combined experience” could mean 5 people each with 4 years of experience.
2. How long has the property manager you are talking with been doing property management?
The property management industry has high turnover. Will the property manager you are talking with still be around next year? Don’t be the rest case for a Realtor learning how to do property management!
3. How many properties do you manage and can I get references?
Make sure the company manages enough properties to show experience, but not so many that you become just a number to them. Any company can find two or three owners who like them, so to get unbiased reviews, read reviews on Google and the Better Business Bureau.
4. Where is your office located and in what geographic areas do you manage?
A good property management company won’t try to manage everywhere. Find a company that specializes in your neighbourhood and is geographically close.
5. What is the worst problem you ever encountered and how did you solve it?
An experienced property manager has encountered many challenges and should have clear and defined procedures explaining how they will respond to any problem imaginable!
6. What is your marketing program for my property?
A comprehensive marketing program will use professional signage and extensive Internet advertising. Ask how many web sites will list your property – the more the better. 60% of people looking for rentals go to more than 5 sites, 25% search more than 10 sites. You want your property listed on at least 3 unique internet sites.
7. What is your criteria for qualifying applicants and do you do it in-house?
This can be the most important aspect of leasing. When an individual is interested in renting your property, they should complete a detailed rental application. The applicants’ income, employment, credit, criminal, and eviction history should be reviewed. This information should be analyzed through a model, helping to ensure you get a high quality, long term tenant. Make sure your property management company actually calls the applicants current and prior landlords – many do not!
8. Who takes care of maintenance requests?
The tenant should contact the management company directly for any repair problems that arise. After they have spoken to the tenant to confirm the nature of the repair issue and whose responsibility it will be, they should send out the appropriate vendor to make the necessary repairs. If a tenant has caused damage, they should be back-billed for the cost. If the repair is due to no fault of the tenant, the cost of the repair should be billed to the Owner of the property. All vendor must be verified to have workmans comp and liability insurance coverage. Only venders who meet high standards of quality, timeliness, and competitive pricing should be used. There must also be a 24-hour service in the case of maintenance emergencies.
9. What do you charge for management, leasing, and are there other fees?
These fees vary from company to company. Don’t just look for the cheapest price. When it comes to property management, the old saying is true, “You get what you pay for.” Beware of companies that charge any of the following: annual administrative fee, monthly fee for management while the property is vacant, other fees above a flat percentage of actual income.
10. What insurance do you carry and what should I carry?
The management company should cay at lease $1MM in coverage on both themselves and their vendors. You should carry a landlords policy that also includes coverage for lost rent in the case of destruction of the premises, and liability coverage of at least $1MM.
11. How often will you inspect my property?
Drive by inspections as well as interior walk-though inspections should be performed regularly and documented with digital pictures.
12. What makes you different or Why should I choose you?
Property management is very difficult and complex. Anyone can do it, but very few can do it well. Choose someone who has a proven track record of doing each aspect of property management better than the rest: from advertising to qualifying prospects to rent collection to minimizing your legal risks to maintenance to minimizing turnovers.
Interested in learning more? We have a great report on our website on how to hire a property manager. You can download it for free here. And if you’re interested in learning more, feel free to book a call with our team today.