Finding the best property management company to look after your investment is never easy. It’s a process that demands a lot of attention to detail, research, and intuition.
That’s because choosing the wrong people can cost you your investment. And that’s something you don’t want to happen.
That’s why your vetting process has to be thorough and must include asking all the right questions.
So, what should you ask? Here’s a list of 29 questions to ask prospective property managers before hiring them:
1. What services do you have to offer?
Managing a rental property involves a lot of things including marketing, leasing, rent collection, maintenance & repairs, and so on.
Basically, asking this question helps you to know just how much the property management company is ready to do for you.
Always go for a company that offers you exactly what you are looking for.
2. How long have you been in the industry?
The main takeaway with this question is understanding their level of experience.
Companies with more experience tend to be more dependable, knowledge and have more ratings, and reviews.
Generally, their ratings and reviews will help you to paint a clearer picture on what to expect. On the other hand, skills and knowledge give you some reassurance on the quality of services you will get.
3. How big is your team?
The number of staff members tells you a lot about the quality of service to expect.
The number is usually directly proportional to the number of properties the company manages.
More members can work in your favor because there are a lot of people on hand to help you. But it can also mean that these employees are spread thin across many properties.
That’s why it’s good to it keep in mind, but you should always ask more questions to get a better idea of who you would be doing business with.
4. How many properties do you manage?
In most cases, the best figure should be between 80 and 600 rental units.
Why is this important?
Well, if the company manages fewer units, it can mean that they are inexperienced.
On the other hand, if they manage a lot of units (over 600), your property may not receive as much attention as you’d like it to.
5. Are you insured?
An insurance cover is always imperative because it means that you can get compensation in case something happens to your investment.
6. Are you a member of any professional organization?
This is one of the easiest ways to find out whether you are dealing with a professional management company.
Also, companies in professional organizations always try to offer the best services in order to maintain a credible reputation.
7. Do you have references?
Getting reference information can help you to confirm whether the company is as good as it says.
Basically, references come in the form of a client’s testimonial, ratings and review site, or even from another trusted and reputable company.
8. What happens when I pull out of our contract?
Before getting into any kind of contract, it’s always wise to fully understand your options.
Make sure you are okay and comfortable with the terms of the contract.
That way, in case you aren’t happy with the management company, you’ll know what you have to do to get yourself out of the contract without incurring extra expenses.
9. What type of properties does your company manage?
Obviously, not all properties are the same.
Is your rental property commercial or residential? Or is it a single-family or multi-family rental property?
You have to know which kind of property the management company is more familiar with.
If they have experience in managing properties like yours, then they may be what you are looking for.
10. How fast do you respond to owner or tenant requests?
We can all agree that response time is always a vital contributor to the success of any business.
Slow responses not only inconvenience you and your tenants but also build up a tenants’ urge to vacate your rental units – due to negligence.
11. How do you come up with rent prices?a
Lower rent prices lead to losses while high prices lead to vacancies.
That’s why the amount has to be just right.
So, which criteria does the company use to calculate the best price for your rental units?
A competent property manager knows how and what to do in order to come up with an acceptable and profitable rent amount.
12. How do you collect rent from renters?
One of the biggest reliefs that come with hiring a property manager is rent collection.
That’s because you won’t have to play the “cat and mouse” game with your tenants anymore.
Knowing how the manager collects rent will help you to know how efficient, safe, and convenient their methodology is for you and the tenants.
13. How much rent do you collect monthly?
If it’s less than 100%, you should consider looking for another property manager.
14. How does your lease renewal rate compare to turnovers?
A low turnover or high lease renewal rate (at least 80%) is a clear indicator that the company is competent.
This means that the tenants are happy with the services they are receiving.
15. How many of your rentals are often vacant?
This figure or percentage needs to be low. Very low!
16. How long do your rental units stay vacant?
Anytime shorter than two weeks may mean that the company is charging a smaller rent amount; which means you won’t be getting the most out of your investment.
On the other hand, if the vacancy period lasts for more than a month, it could mean that the property manager is charging a high rent amount.
Or, they are having trouble marketing your property or your rentals are not in good shape hence scaring away potential tenants.
17. What’s the average tenancy period?
A longer average means that the tenants are happy with the property and the management company.
18. How do you market vacant rental units?
Nowadays, there are a lot of ways to market a rental unit.
However, the method, efficiency, and relevance of each marketing strategy greatly determines how many people will be reached.
Go for managers who have the experience and skills to run successful marketing campaigns.
19. How thorough is your tenant screening process?
Finding tenants can be easy, but finding the right ones can be a bit tricky.
How does the company vet potential tenants?
What qualities do they look for in a tenant?
How thorough is their background check?
20. What do you know about the Federal Fair Housing Laws?
When it comes to housing, discrimination is a serious offense.
That’s why you need to make sure that your prospective property manager knows these laws; word for word.
21. What’s your stance on renter’s insurance?
Is it optional or a must-have?
This kind of insurance is often ideal in the sense that it is meant to offer you cover against perils like fire, theft, and vandalism.
22. How do you communicate with tenants?
In any kind of relationship, communication is always essential.
That’s why there has to be an easy and effective communication channel between the managing company and the tenants.
23. Does your company markup on repair and maintenance?
Steer clear of companies that do this.
Why? Because it can negatively affect your profits.
24. What are your maintenance reserve requirements?
A maintenance reserve is the amount of money set aside to cater for repairs and maintenance.
Depending on the size and age of your rental property, you can estimate how big the reserve should be.
Once you get the company’s figure, a simple comparison will tell you whether or not the amount is reasonable.
25. How long do evictions take?
In most cases, an eviction is always a rare occurrence.
But, when it does happen, it needs to proceed quickly and in a professional manner.
Go for managers who work fast to see this process through.
26. How frequently do you evict tenants?
A low number of evictions often signify the property manager’s ability to find good tenants.
Unfortunately, the opposite is also true. A high eviction rate shows that the manager doesn’t know how to screen tenants properly.
27. How will you keep me updated?
Keeping tabs on your property’s growth or progress is a must.
You have to make sure that the manager has a flexible and easy way of sending you your investment’s status updates whenever you need them.
28. What pricing options does your company offer?
Do they expect a flat fee or just a percentage of the rental income?
Seeing as each option has its own set of perks and downsides under different circumstances, it would be great to know which option they prefer.
This way you can choose a company that has a favorable pricing option.
29. Are there any miscellaneous fees?
To properly manage a rental property, there are several needs that have to be met.
That’s why, sometimes, property managers may charge fees for extra services including evictions, vacant units, maintenance, new tenant placement, and so on.
It’s always wise to go through the contract agreement to learn about these fees and to make sure that you are okay with them.
These are just a few of the best questions to ask a rental property manager before hiring them. They will help you to narrow down your search in order to find the best and most suitable property manager for you!