We’d like to start by saying congratulations on your new investment property! That’s a big deal and it deserves to be celebrated. So…
Woohoo! Good for you!
If your plan is to manage the place on your own, we commend you. But if you have neither the time nor the inclination for handling day-to-day maintenance or managing tenants, then you’re probably in the market for a property manager.
Finding the right property manager takes a few initial steps that you might be tempted to skip, but we’re here to talk you out of jumping into business with the first management company with a snazzy eye-catching website. Whether you’re a few miles away from your investment condo or across the country from the two-bedroom cottage you plan to rent out, you’ll want to know your property is in good hands.
Trust us, the time you put in now will save you the headache of dealing with tenants who were not properly screened, sorting through faulty accounting records, or worrying over months-long vacancies. When all is said and done, you’ll be glad you followed these four tips for finding the best property manager:
Ask agents and other property owners in the area for referrals. Attend meetings at a local property owners association and ask there, too. But don’t just jot down the names of property management companies. Ask specific questions about why they’re making the referrals, what they think the company does well, what they think could be improved. Also, be sure to clarify what kind of properties they’ve turned over to these companies. If you have a commercial building, but all the referrals are for companies that specialize in multi-unit residential properties, they won’t do you much good.
Get more details
Once you have a handful of referrals, do an online search of the recommended companies. Look at their website and their properties. Are their rental ads paid or only on free sites? Where applicable, visit their properties and talk to tenants. Check out the company on the Better Business Bureau. What’s their grade? Look up your state’s licensing and certification requirements for property managers. Call the company and ask about their licensing and professional affiliations or certifications with property management organizations. Use the Internet to verify those answers.
Ask the important questions
Once you have at least three companies that have passed your initial screening process, interview the potential candidates. Start with the following 15 questions:
1) How do you advertise vacancies?
(You’re looking for evidence of aggressiveness here).
2) How and when do you show vacant properties?
(Must be more than just Monday through Friday 9-5 to ensure the maximum number of potential tenants with full-time jobs.)
3) How do you screen tenants?
(Background checks are a must.)
4) How often do you conduct routine for property inspections?
5) How do you oversee and arrange for repairs?
6) How do you handle after-hours emergencies?
7) How do you collect rent?
8) Do you understand the city, state, and federal laws for property management and dealing with tenants?
9) Do you know the safety codes for my type of property?
(Smoke detectors, window guards, etc)
10) How many tenants have you evicted in the last year?
(High numbers indicate less-than-thorough tenant screening.)
11) How much is your fee?
(Should be 4%-15% of rent)
12) What is included in the management fee?
(Tenant placement? Maintenance? Advertising? Evictions?)
13) Is the fee based on rent collected or rent due?
(If they’re getting paid while your property is vacant, they won’t be quite as motivated to fill it.)
14) Will I receive monthly income and expense reports?
(Ask to see a sample. If they can’t provide you with one, their practices might be less than efficient, which could cost you money in the long run.)
15) When and how will I receive my money?
Be bold in your information seeking. If your questions are met with impatience, annoyance, or anything other than professional respect and courtesy, then cross them off your list.
Call them, just as you would for tenants or employees.