Some people self manage their rental properties. Some people don’t want to handle it and hire property management to do it for them. If you are going to hire management, you want to ensure you are getting good quality service for your dollar.
Finding Good Property Management
There are several questions you will want to ask any property manager you inquire about. These questions are important so you know what you are getting for the service and how everything is handled from communication to filling vacancies.
First things first—call at least three property management companies in your area.
This is no different than getting multiple estimates from contractors on a job. How can you know if you are getting a good deal or quality service if you don’t know the market for it?
Questions to ask while vetting property managers
- What are all their fees?
- How much do they charge to place a tenant?
- Is there an additional fee when they need to schedule a maintenance repair?
- Is there a fee for paying out the rental income to you?
- Do they charge a fee for posting late notices to tenants?
- What is the cost if they need to evict a tenant?
- Is there any kind of annual renewal fee?
Ask the questions above along with anything else you want to know. Basically, you will want to know everything from the percentage of rent they charge for management service to any additional fees for specific actions.
Be Clear on What the Monthly Fee Gets You
Make sure they clearly tell you the specific services the monthly fee provides. This fluctuates from company to company depending on the additional fees they have broken out.
Discuss the Cost Threshold for Repairs
You don’t want the property manager calling you every time there is a minor repair. Ultimately you decide at what dollar threshold the manager should reach out to you, but ask them what amount they generally use to see what they say.
Personally, I recommend a $200 threshold. If a repair will cost less than that amount then I do not want to be bothered with a phone call. I mean, the main point of having property management is so someone else is dealing with the tenant calls and maintenance.
How do they contact you and/or the tenant?
- Is it direct phone calls or emails?
- Do they have a website where all info, communications, and documents go?
- Are tenants able to contact the management company 24/7 with maintenance issues?
That last one is important because if something unfortunate happens during the middle of the night, for instance a busted pipe or water line, you don’t want extensive damage being done because management isn’t available to ensure the tenant shuts off the water and/or knows how to.
How do they go about advertising your property to fill the vacancy?
- What outlets are they using to advertise your property?
- Do they work with any local real estate agents or have in-house agents?
Last, but not least…
How does the relationship end if we no longer want to retain their management services?
Is it tied to the lease of the given property or is it based on when you initially hired them to find a tenant for your property?
Be clear on this because you will want a smooth transition if and when you decided to make a switch or self manage.
Remember, the more you know upfront, the less potential surprises you will get down the road. Don’t be afraid to ask as many questions as you like.
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