8 Questions You Should Always Ask When Hiring a Property Manager
Whether you own one property or several, you’re here because you’re considering hiring a property manager. Conducting a thorough screening process can help you select the perfect property management company or individual that will suit your needs and help you run your rental property/properties with ease. And while interviewing companies to fill the role can feel tedious and stressful, it doesn’t have to be, you just need to know the questions to ask.
Are You Licensed and Certified?
Every state has unique requirements for being a property manager, so ensure that they have the necessary certifications or licenses before conducting business. For example, California requires that you receive a real estate license and sign with a brokerage before obtaining a property management certificate from an accredited institution. In Florida however, no specific certification is required but you must be a registered real estate broker. Be sure to keep this in mind especially if your real estate portfolio includes homes in several states.
What Kind of Properties Do You Manage? How Many Properties Do You Manage?
This question can give you a better understanding of their business size and daily workload. Understanding their capacity to manage the daily tasks associated with property management whether it be commercial or residential is crucial in making your decision. Commercial property management requires an entirely different world of experience. If you own both commercial and residential property, hiring a company that manages both can be beneficial to you as well. You want to be sure that your property is receiving the attention to detail it deserves.Â
What is Your Tenant Screening Process?
Inquire about their screening process. You must hire a company that has a rock-solid screening process that includes employment verification, rental history, background check, credit check, and references. As you’re discussing this with them, you will gain insight into their opinion on how to identify strong tenants. Ask them to share anecdotes, for example, a tenant sometimes give ‘fake’ employment or rental references. If they are calling a supervisor’s cellphone, anyone can pretend to be a supervisor. The savvy property manager will call the main number of the business to avoid being duped.
How is Rent Collected?
This is one of the first details you should iron out when selecting a property manager or property management company. This determines the time frame in which you will be paid, the security of the payment, and the efficacy of the management company. Ideally, you are looking for automated rent collection that streamlines your income without having to worry about collecting rent in three different methods from three different properties. Tenants prefer paying online and this attracts a bigger pool of potential renters.
What Percentage Does the Property Management Take? Are There Additional Fees?
Just as important as the last, this question should be addressed early on as well. Some companies charge a flat rate while others charge a percentage. Inquiring about additional fees upfront will save you the headache when faced with hurdles like eviction, property vacancy, maintenance, etc. It’s important to agree on a clear pricing structure that will remain consistent for the life of the contract with your property manager.
Who Handles Maintenance?
Does this company or manager have an in-house contractor, plumber, electrician, etc? Do they have specific local businesses on call? Also ask to see some example documentation and records for any visits or maintenance to get a sense of typical rates and level of professionalism.
Do You Have References?
Just as you would ask for references for new tenants, you should ask for references from your potential property manager. Whether they are other clients, real estate agents, contractors, or mortgage brokers, having a conversation with someone who deals closely with the company can give you great insight as to what it looks like to work with them.
What are Your Rates of Renewal and Tenant Turnover?
You are ideally looking for a renewal rate that is higher than the tenant turnover rate. Frequent renewals are an indication that the tenants are happy with the management and receive quality service and quick response times. A high tenant turnover rate can be a red flag and should be questioned further.
