What to Ask When Looking for a Good Property Manager

If you’ve ever searched for a good property manager before, then you know how difficult it can be to find a good one for your rental property. There are several property managers out there, probably more than what you really need to bring your property into the market.

With so many choices available, you may find it difficult to choose one for your unit. But don’t worry – if you ask the right questions while shopping around for property managers, you’ll get a better idea of who would make the best fit for your property. Ask them these questions when discussing your property to see if they’re the right property manager for you:

1. What type of properties have you managed?

Experience counts for a lot in property management, and it can separate the good ones from the ones you should steer away from. Experience in this field, however, isn’t just about the number of years worked in the field; it’s also about what type of properties they’ve managed. Depending on what type of property you have, you can either go with someone who specialises in managing properties like yours or someone who has more varied experience managing different types of properties.

2. How do you screen potential tenants?

Screening potential tenants is one of the most important steps to property management, so the way they do this often reflects their level of service to your property. Ask them how they’ll match tenants to your property and what their process is like for finding tenants. This will give you a better idea of how they operate and what lengths they’ll go to find the right match for your property.

3. How do you handle late payments by tenants?

Finding tenants is just one phase of property management; the longer phase involves managing the tenancy itself. Asking them this question will show you what their management style is like and how they’ll deal with critical rental issues like these. See if their process aligns with what you expect them to do and how you want your property to be managed.

4. How do you respond to complaints?

Similar to the previous question, this question allows you to gauge how well a potential property manager will handle the landlord-tenant relationship. Remember that a property manager will act as the mediator between you and your tenant, so it’s important that you’re comfortable with their process for dealing with any complaints or issues.

5. How often do you do inspections?

Routine inspections are important to any tenancy agreement, and the number of times it’s done per year will help give you better peace of mind as the landlord or owner. This question will also show you how well the property manager will look after your property even after the start of the tenancy.

6. What’s the right rental price for my property?

If you’ve done your research beforehand, this question will let you assess how well a potential property manager knows the market and what they can offer you. It also allows you to get a better idea of what your property is worth in the current market. Compare their answer with different property managers to see what they offer and to better understand where your property stands in the market.

7. What are the things I can do to improve my listing?

Asking them this question won’t just reveal their expertise in property management, but it’ll also help you put your property in the best position in the market. Note their suggestions, assess how relevant they are, and decide whether or not they can get your property where you want it to be.

8. What are the full costs and fees for managing my property?

Some have small sign-up fees but a variety of hidden fees once you sign on and let them manage your property. Avoid getting surprised by such fees, and ask them to indicate all management and service fees included in their service. The more complicated their fee structure is, the bigger the headache (and expense) it will likely be.

9. What can you do that others can’t?

This is where prospective property managers will try to sell you on what they offer and how well they set themselves apart from the competition. It’s also the part where you assess the intangibles in any working relationship, giving you a better idea of how well they meet your standards. Listen well, take notes, and assess if they provide what you’re looking for.

Property Management Services – A Real Estate Investor’s Best Friend

Do you own an investment property that you’re renting out, and you’re currently handling all of the chores of being a landlord yourself?

Are you thinking about investing in rental properties, but you’re not sure if you’re up for the task of being a landlord?

If you answered yes to either of those questions, whether you are holding onto or considering investing in a single-family rental (SFR), duplex, or triplex, you should think about engaging a professional property management firm to take the work off your shoulders.

Let’s take a look at what property management is, what a professional management company handles, and how to decide not only if it’s time to hire one but also how to hire the right property management firm.

What is Property Management?

Let’s start off with getting an understanding of what a property management firm does and doesn’t do. There are several critical tasks a property manager can help you with.

Setting the right rental rate: You can always ballpark this by looking through the classifieds, but a good property management company actually conducts thorough market studies to set a rental price for your property. This makes sure you have a great balance between maximizing your monthly income and keeping a low vacancy rate.

Collecting the rent: One of the most difficult aspects of being a landlord is collecting the rent. Property management firms have efficient, tried-and-true systems that will do a great job of collecting the rent and maintaining on-time payments.

Marketing and advertising your rental unit: When vacancies occur, you want the rental unit occupied as quickly as possible. A professional property management firm has experience that helps it market your property in just the rate way to make sure someone moves in quickly.

Finding and managing tenants: The property management firm will take the work out of finding and managing tenants for you. This means screening new tenants for criminal and credit checks, collecting references, and getting the lease signed. Once the home is occupied, handling routine and emergency maintenance and inspections are part of what a professional management company will do for you.

Managing relationships with contractors and other vendors: Do you have deep-seated relationships with all of the maintenance workers, tradesmen, contractors, suppliers, and vendors needed to properly manage your rental? Probably not. But a property management firm does and can get you the best work for the best price, while handling the burden of overseeing necessary maintenance projects for you.

Keeping you in compliance with the laws Housing regulations and property laws are complicated and confusing when you’re renting and maintaining your rental property. These can include local, state, and federal regulations, along with fair housing regulations like the Americans with Disabilities Act. A property manager can keep you out of hot water by keeping your property up-to-date and in compliance with all of these regulations.

Allowing you to invest from afar: If you’ve moved to a place where investing in rental units don’t make sense, you might think that investing in SFRs or other rental properties isn’t possible. With a good property management company by your side, you won’t be so limited in your investment opportunities.

I only have one property; so why do I need a property manager?

If just reading through all of the tasks that a property manager can handle for you isn’t convincing enough, consider this: do you want to be able to go on vacation without interruption? Do you really enjoy phone calls about backed up plumbing at 3:30 in the morning?

Chances are, you want the freedom to leave town for vacation or just have uninterrupted time with family for the holidays. You don’t relish the task of dealing with emergency maintenance chores in the middle of the night, and you probably dread the thought of trying to find a good tenant when your existing ones move out.

Even if you only have a single investment property that you’re renting out, you can benefit strongly from hiring a property management service. They have decades of experience that you’d be hard-pressed to match yourself, and can ensure your property is maintained impeccably while still maximizing your profit.

Okay, I’m convinced, but how do I know who to hire?

The best way to find out about quality management companies is based on the experience of others. If you are local to your rental property, attend your regional real estate investment association meetings to get recommendations from other landlords.

You want to make sure you find out how many units the company is managing, and how many employees they have doing the work. A trained employee with the right tools and proven processes can successfully manage between 30 and 40 units, as long as they’re not also playing accountant.

When you’re interviewing different qualified property management firms, here are the questions you should get answers to:

What is the cost? Generally, the monthly fee for property management is between eight and twelve percent, plus expenses. Remember you get what you pay for, so it is important to balance the cost and services.

How well do they communicate? You want someone who uses email, but is still responsive to the telephone. If you don’t get a response in a timely fashion, it’s time to walk somewhere else.

How easily can I terminate the agreement? If things work out, what will it take to terminate your agreement? Make sure you know this up front, along with any penalties.

How experienced are they with Section 8? This can be supremely important, since Section 8 housing and tenants are great income opportunities. Make sure they have adequate experience with such properties.

If you do your research, you can readily find a reputable firm to handle your rental investments for you. This will free you up to enjoy the fruits of your investment without as much of the hassle.

The Real Property Management Issue Is Education

The Conundrum of Investment Properties

Investors seeking diversification have frequently turned to a rental property or a collection of rental properties to even out and spread risk across their investment portfolios. As with any investment people should consider all of the issues, problems, and pitfalls along with the potential returns. Unfortunately, a lot of investors aren’t aware of the potential problems and do not take the time to investigate these issues before they close escrow. A property management course and a course in basic real estate investment would be great investments of time for someone considering rental properties as a source of investment income and long-term investment. Some of the problems and concerns are discussed below.

Inexperienced Agents and Uneducated Investors Make a Deadly Concoction

Rental property investors often utilize the services of an unseasoned realtor who does not fully understand rental properties, who does not fully understand return on investment, and who does not fully comprehend what cap rates are. Most of the time these investors just turn to their friend ‘the realtor’ or use any realtor they are familiar with or are comfortable with to purchase these types of properties sad as that may sound.

The fact is most real estate agents are not savvy enough to understand rental properties, cap rates, return on cash, return on investment, leveraged investing, and the common terms associated with investment properties. To compound this fact most investors initially are equally inexperienced and lack the proper expertise to locate and purchase a high performance investment property. No one needs to look further than this question: Why would an owner be selling a high performance investment property? That question should be the first of many asked by both the agent and the investor. One problem is that some investors are just so excited to get into a property they look beyond the truth and the numbers and just want to get control of the property. Oftentimes this is a flawed approach because most agents will hesitate to stop the eager purchaser for fear of missing out on a healthy commission.

The Property Management Profession is an Equalizer

After an investor has closed escrow, if the inexperience agent hasn’t offered to ‘manage’ the property for them, many of them decide to manage the property themselves (only licensed real estate brokers can manage rental properties). When these unsuspecting owners are faced with the subtleties of Fair Housing laws, Equal Opportunity issues, civil rights issues, anti-discrimination issues, bad tenant screening issues, notice of default issues, eviction issues, and finally collection issues many times they turn to a professional property manager or property management company to help rescue their sinking ship.

If rescued timely a professional property manager can turn around an investment property and help make the investor’s decision pay dividends. With a competent property manager the return on investment can actually be realized and the owner actually can have time to enjoy the investment, not dote on it or worry about it. The property management company will take care of the investment, the maintenance, the tenants and all of the concomitant issues associated with the property.

Property Management Education Course

Educating both inexperienced real estate agents and beginner investment property owners about prudent property management is critical for maximizing the investor’s return on investment. It is rare for an owner to successfully manage their property or properties and make the maximum possible return available in that particular marketplace. The reason it is rare is because the typical manager-owner is not utilizing the latest and greatest property management techniques, software, screening procedures, and most importantly is not keeping up with the ever changing landlord-tenant laws. Each January there are several seemingly ever increasingly tenant-debtor favored laws enacted which most people are not aware of. When a new law takes effect that is another potential pitfall for the lone-ranger owner to violate and end up on the wrong side of the complaint.

The sure-fire way around this potential issue is to hire a property management company to manage and protect the owner’s investment, and most importantly maximize the return on investment. One other way around this problem is to have every owner take a property management course and learn the profession from the ground up without going through the hard knocks of experiencing tenant problems first hand.

Finally, an owner could hire a property management company that in addition to all of the typical staff also has a real estate lawyer on staff who can solve and answer all of the legal questions that seemingly end up front and center. This would be a truly educated decision and an easy one for the owner to make.