7 Tips for Choosing a Property Manager for a Rental Property
Are you an investor looking for a suitable property manager for your rental property? The right property manager can help you manage your investment and maximize your income. On the other hand, a bad property manager can cause headaches and even cost you money. If you have rental property, one of the most important decisions you’ll make is finding a competent and trustworthy company to manage your investment property. Keeping up with the day-to-day business of your investment is a crucial part of managing your wealth. There are several factors you should consider before selecting your property manager. Let’s look at some of those.
Check a Property Manager’s Licensing and Insurance A good property manager should be licensed by the Department of Real Estate. The legal side of things can get murky when landlords and tenants disagree on who legally has rights over parts of the property, so it’s important that both parties know where they stand legally. If you rent a room in your home, it might not matter — but if you’re putting apartments in multiple places and inviting strangers into them regularly, hire someone who knows how to handle these situations.
Get References So, you’ve found the rental property of your dreams. You’re ready to jump into the exciting task of rental property ownership and need to find a property manager. This is a big step in your life, and it can be tempting to select a property manager based solely on price. Don’t do it! Check reviews online from past clients/tenants first. Seeing reviews from people like you helps ensure the management company has been honest and reliable with others — and keeps you safe from fraudsters looking to make a quick buck. How did past renters talk about how responsive their landlord was when something went wrong… Were repairs made quickly? Were fees reasonable? Hiring an agent based on recommendations means less risk for everyone involved.
Look at Previous Experience Don’t entrust your property to someone with no experience. For starters, ask about the property manager’s previous experience managing similar properties (e.g., apartments and single-family homes). This will give you an idea of their level of expertise and professionalism and help you narrow down a list of candidates as early as possible. Also, inquire whether they have direct experience with your type of property. For example, somebody who doesn’t know what it’s like to manage an apartment complex might not know how to handle tenants with different personalities. If someone has handled many rental properties in your area or similar ones in other cities around the country (or even globally), that will tell you that they’ve managed properties at every stage of their life cycle, and are more likely to understand challenges unique to your neighborhood or market.
Inquire About the Properties They Manage Before you hire a property manager, consider the nature and number of properties they’ll manage for you. You can find this information on their website. Inquire about the type of properties they manage and how long they’ve done so. If you’re seeking someone who has experience managing older buildings, make sure that is brought up at your initial meeting. Otherwise, you could end up with a property manager who isn’t comfortable owning older properties and/or dealing with their associated problems. If possible, find out how many times the property manager has sold a rental property while acting as its manager. If they’ve never sold one before, either they haven’t been doing it long or aren’t successful. Also, find out whether complaints have been filed against them by reviewing consumer protection websites such as RipoffReport or PissedConsumer. These websites publish reviews submitted by members of the public about businesses’ products or services.
Ask About Their Networks Dig into the details once you’ve narrowed down your list of potential management companies. Find a company whose philosophy and style mesh with yours. Some questions to ask:
How long have they been in business? A good answer would be at least five years because that shows stability and reliability in what can be a volatile industry.
Does their website look professional? If they don’t have a website, or if you can’t find it on Google, this could be an indication of trouble ahead — especially since they’ll likely need to advertise vacancies on sites such as Craigslist.
Do you like the team members you speak with? Everyone has different preferences when it comes to customer service — some people prefer chatty agents, while others prefer straight answers over email — but anyone unfamiliar with even basic real estate terms shouldn’t be managing your property for you.
Find Out How They Screen Tenants and Collect Rent Although you may be tempted to skip this section, don’t. While choosing a property manager is relatively easy, some factors can make the process difficult and stressful. If a property manager has poor screening skills or is unable to collect rent from tenants, you’ll spend more time dealing with headaches and less time focusing on your real-estate investment goals. All good property managers have certain traits in common. They are professionals who have been screened for professionalism and can manage your rental property efficiently. In addition, every successful property manager will have certain characteristics that will help them serve as an effective partner for you as the owner of a rental home:
They understand the importance of collecting rent quickly and efficiently
They are committed to making maintenance calls on time and maintaining high standards of cleanliness
They provide clear communication regarding their responsibilities.
Check off each of these points before making your decision.
Ask for a Sample of Their Agreement or Contract If you’re like most people, you probably don’t spend a lot of time reading contracts. But if you’ve never signed one before, know what you’re getting into. A good property management agreement should be clear, easy to understand, and updated regularly. Make sure you understand everything in the contract and ask questions until you do.
The Bottom Line Get all of your questions answered before you choose a property manager for your rental property. The most important part of the hiring process is establishing your expectations for the relationship and understanding theirs. This will ensure a successful (and profitable) relationship for years to come.