If you’re a property owner of one or several homes, you might be looking into hiring a property manager or property management company to steward your properties on your behalf.
Filling such a position allows you to delegate responsibility and can alleviate stress especially when handling multiple properties, but it is also crucial to do your homework and ask the right questions in order to find the right fit for you and your properties.
When looking to fill a property management position there are several questions that you should be asking to ensure you are selecting the right fit.
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Is it time to hire a property manager?
First things first: Many factors will help you determine if hiring a property manager is right for you. A few base considerations:
Depending on how close you are to the property or properties in question, it may not be feasible for you to make regular check-ins or maintenance calls. The further you are, the more difficult it may be to make those routine visits that are crucial to successful management.
Another important question to ask is how many properties do you own? The more properties that come into play the more tenants, and the more tenants the more maintenance, the more complaints, the more paperwork for new inhabitants and the more vacancies.
Keeping tenants happy (and your properties filled!) requires responsiveness 24-7.
A third perspective is your personality. Investing in real estate is a business, and you must be assertive and remain somewhat non-personal when pricing rent, dealing with late rent, or communicating with problem tenants. A property manager remains a neutral, non-emotional, third party.
Are they licensed?
At a foundational level, any considered property managers should always be licensed as they will be engaging in important rental/ leasing and legal paperwork. Look into additional certifications and/or licensing, as some states require a broker’s license to manage properties.
How many years experience do they hold?
You should be looking into a property manager or management company that has at least five years of experience and a track record of handling multiple properties.
This is a good window of time in which they’ve been exposed to a variety of management experiences whether it be the good, the bad or the ugly. Just like with anything else, the more experience, the better.
What kind of rentals do they specialize in?
There are a variety of rental properties, and many management companies specialize in a certain domain. You don’t necessarily want a company who specializes in commercial rentals to be managing your single family homes as they may not offer the same experience or involvement to the tenants and your properties.
What is their average vacancy versus new tenant rate, and how long do vacancies typically sit open?
If they are managing properties with a high tenant retention rate, this goes to show that they are providing a level of service that establishes loyal relationships with tenants while also setting attractive but competitive rental rates.
On this note, ask how long their vacancies typically sit open and what methods they use to fill those properties. Quickly finding new tenants for a property is usually a good indication that they are savvy with marketing. Which then queues the next question…
What strategies do you use to fill vacancies and market the current properties they manage?
Years and years of management experience is not indicative of a successful management company. As the housing market evolves, so do the means in which people rent.
The majority of property rental is done online and it’s crucial to have a manager who is savvy with the new trends in posting and inquiring about housing. Do they have a social media presence and digital marketing strategies? These may be beneficial to you and your properties.
What is their screening process of potential new tenants?
This is big. You want to ensure that you are considering an individual or company who performs thorough screening processes that include employment status of applicants, credit scores, and background checks.
This ensures a peace of mind that you will be renting to responsible tenants who will respect your home and help maintain a trusted line of communication. Always avoid any companies who delve in discriminatory practices that go agaisnt the Fair Housing Act.
Do they have references?
Just as if you were hiring to fill any other job position, you want to see some references and proof that they will uphold their responsibilities.
Whether it be speaking with those who have worked with the property manager/ management company in the past, previous tenants, real estate agents and brokers, these can be reliable resources who will give you honest feedback on what it was like to work with them.
With the power on the internet at our fingertips, reviews may be available online through the Better Business Bureau or the Chamber of Commerce to name a couple.
It may take several interviews and conversations before finding the right fit for you and your needs, but asking these questions should put you on the right track to hiring a property manager to successfully run and grow your business as a property owner.