11 Questions Landlords Should Ask When Interviewing a Potential Property Management Company

Owning investment real estate is a great option for those looking to make a longterm commitment as opposed as a shortterm speculation. The management of such investment should always be trusted to professionals who are dedicated and committed to the industry and know how to deal with complex situations that are otherwise commonly ignored by inexperienced landlords.

It is of the utmost importance that property owners know how to select and interview the property management company that best seems to specialize in the kind of investment that they are looking to have managed.

If you are unsure what to ask your potential property manager before you sign a long term agreement with them, here are some questions that you can use as a guideline.

1. What kind of property management experience do you have? You need to know for how long they have managed property and whether they have enough back up from the rest of their group.

2. How many properties do you currently manage? Hiring a property manager that handles several thousand units could be somewhat risky as your property might end up lost in an ocean of other properties.

3. How often do you inspect occupied and vacant units? It is important to know the frequency of inspections in occupied units. The reasons why you need to know this information is because you need to be assured that there will be a comprehensive assessment of potential damage to occupied units that has been caused by tenants. You also need to know the frequency of inspection though vacant units to prevent any potential risk of fire or other casualties. Trust me, I have seen fires occur in vacant units.

4. What do you do with the information obtained from unit inspections? This is particularly important to ask because you need to make sure that the property management company has policies in place regarding the payment of damages to units caused by tenants or their guest. It would be of no benefit at all if they just report to you that all units were inspected, if they do not not have an aggressive plan of action based on unit inspections.

5. How important is preventative maintenance to you and how is this handled by your company? Extensive and costly deterioration can occur to properties if there isn’t a preventative maintenance plan in place. Your property manager should keep a preventative maintenance log showing all items inspected and addressed as well as the signature of the maintenance supervisor acknowledging completion of all required tasks.

6. How do you handle ongoing/daily maintenance? You need to know whether one or more dedicated maintenance technicians will be assigned to your property (based on the size of the property and number of units). It is also important to know the level of engagement of the maintenance supervisor (if any) and his role in ensuring that all maintenance issues are being addressed.

7. After hours emergency handling. Have the property manager explain their process for handling after hours emergencies such as water leaks, fire or any other casualties. Ask whether there is an after hours phone number which tenants would have access to.

8. Tenant Selection Plan. You need to know if the property manager has a Tenant Selection Plan that can be customized for your property. The TSP will help define the requirements that potential tenants would have to fulfill prior to renting a unit to them. You might also be want to be involved in the development of the rental criteria to ensure that only applicant who meet your requirements are approved. Keep in mind that you as well as your property manager are required to observe and conduct business based on Fair Housing Law. Your property manager should be absolutely familiar with what terms to use and which ones avoid when advertising your vacant units and when interviewing applicants.

9. Transparency. How can I have access to review accounts payables, delinquency reports, collections, etc. You as the property owner should define the frequency and types of reports that your property manager should make available to you.

10. Property Market Analysis. Does your management team shop comparable properties to keep up to date with local occupancy rates, average rent rates, amenities offered, specials, etc.? Please be aware that not all property management companies provide this service.

11. What is your area of specialty? It is important to keep in mind that there are several specialties within the property management industry. If you own commercial property, you should probably stay away from property managers that have experience managing only multifamily or condo properties. The most common areas of specialty in property management are: Single Family, Multifamily, Condo Associations, Cooperatives, Retail, Medical, Commercial and Industrial.

Management companies that specialize in the management

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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.

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