Not everyone has what it takes to do a great job. Interviewing a potential property manager is a sure way to certify you are hiring the right person and/or company but you need to ask the right kind of questions.
So, what should you exactly ask them? Let’s discuss the most important questions to ask any potential property management company to help you make the best decision.
1. Do you (or your employees) hold a license or certification for property management?
In some states, people are able to get an official state license that proves they are skilled and trustworthy enough to manage rental properties. Additionally, there are numerous trade organizations that are offer certifications.
Ameritex Property Management, for example, is officially licensed with TREC (the Texas Real Estate Commission) and a member of NARPM (the National Association for Residential Property Managers). All of our leasing agents are licensed as well.
2. What services do you offer your clients?
The goal is to find a property management company that can market, lease, and manage your property. It’s important to make sure this company can provide top-notch maintenance, conduct inspections, and administer in-depth background checks.
Ameritex Property Management offers a full suite of services and customizable plans, focusing on the unique needs of every investor and property owner. Choose from Preferred monthly plans where we take care of everything or flat rate À La Carte plans that you can customize to fit your needs.
Own 5 or more homes? We offer premium plans designed to better facilitate the needs of larger portfolios.
3. How many rental units do you manage?
Too few rental units can signal inexperience or a loss of clients due to poor service. Too many rental units could suggest that you will not be given the best service from this candidate. The number you’re comfortable with is, of course, up to you.
A potential property management company could have hundreds of units but also have the manpower to back it up and ensure that you and your renters will still receive the best possible service available.
These are simply guidelines we recommend you look out for but not definitive by any means.
4. How to you determine my property(s) max earning potential?
Your property manager should know how to conduct a comparative market analysis, comparing your property to other listings in the area, providing the most accurate rental rates for your property.
Don’t rely on your gut! Click here for our free rental analysis and begin maximizing your earning potential.
5. What are your management fees?
It’s important to understand your average monthly fee. Some companies may offer a flat rate, and others will offer a monthly fee based on the rent amount. Ameritex Property Management offers both, focusing on the unique needs of each investor and property owner.
Be cautious of a low upfront management fee that seems too good to be true, because it probably is. You should also be wary of fees exceeding 13% of the monthly revenues. Higher than average fees are only acceptable if they are backed up with unique services that provided value.
No matter who you choose to do business with, make sure you are clear on all expenses you may incur, and your fee structure is outlined clearly by the property manager. It should be detailed in writing in the management contract.
6. Do I pay you if my property sits empty?
It is important to know if a company is going to charge while the unit is empty. A property manager should not require you to pay them if the property is empty. If they can’t keep your property occupied, they should be okay with forgoing some income to prioritize your best interests.
7. How do you market your properties?
Does the property manager’s system include a proactive marketing strategy? At this day and age, marketing strategies should be more than a sign on the street corner.
Your property manager should be advertising properties through a variety of channels, including real estate syndications (such as Zillow, Zumper, Trulia, Hotpads, etc.) and social media; they should also be taking professional quality photos. Visit the rental listings page on their website and review the quality of their current listings. Steer clear of managers who still just place newspaper ads.
8. Do you conduct regular property inspections?
Most property managers do conduct inspections and require a small fee. It’s necessary though to ensure management catches problems before they turn into major issues. Be sure to ask whether a management companies monthly fees include scheduled asset protection walks to assess resident upkeep and vacancy, and proactively addressing any maintenance concerns, saving you money on your investment in the long run.
9. What is your typical turn-around time on a property?
Property Management Companies may define a rent-ready property differently. A shorter turnaround time is always better, as it allows for renting the property faster, minimizing vacancies, and maximizing rent collections. However, if a property manager claims they can turn over a unit in two days, they probably aren’t doing a very good job of inspecting and maintaining systems to keep the unit in good condition for the next tenant.
Ask for a detailed plan for turnover. A productive and experienced property manager will have properties flipped and leased again within 30 days, plenty of time to refresh the unit and perform any repairs.
10. What are your income and screening requirements for applicants?
It’s important for you and your property manager to agree on the standards necessary to rent your property. For instance, many landlords and property managers agree that the tenant(s) must make a monthly gross income of three-times the rent, among other reasonable requirements.
Look for a property manager who will ask the right questions, perform a screening process and background check, and has a system in place to validate income.
11. How Will Repairs and Maintenance Be Handled?
Another primary job for your property manager is going to be maintenance and repairs. When your property presents an issue for a tenant, it needs to be addressed promptly. You can expect rental properties to need some sort of maintenance or repair regularly, this will be their responsibility.
How much should you budget for unexpected repairs and maintenance? Here‘s a good rule of thumb.
12. What’s your average occupancy rate?
The longer the average occupancy, the better. It signals that the property manager is doing a good job. Be sure to ask what their typical lease time is, what % of their terms/leases are 2+ years, and what their retention rate is.
You want a property manager that knows how to reduce vacancy time, increase lease terms, and has the unmatched customer service that leads to increased lease renewals.
13. What’s your average response time to owners and tenants?
You and your tenants deserve a reasonable response time. Period. If your tenants need to wait 3 weeks to get a reply from their property manager, it’s highly unlikely they’ll stick around for a long time. The property manager should agree to get back to tenants within 24 to 48 hours of receiving a request.
Also, make sure tenants can easily communicate issues with the property management company and that the property manager is doing their part to give updates as appropriate, take care of the rental property, and work with tenants on timing.
14. How do you handle evictions?
Look for potential property management companies who strictly adhere to the lease terms. The eviction process should start immediately in case of any serious violations.
When the property management company starts the eviction process, do they do it in-house or hire someone? What is their procedure? It’s a good idea to have the future property manager talk through the standard eviction process.
15. How often will I get updates on my property?
Is no news from the property manager good news? Are they paying attention to the rental property? What type of maintenance issues require notification?
A common complaint regarding property management companies is lack of communication and/or response time. Typically, a monthly report will accompany the rental income, but it’s still important to set clear expectations of when they will, and should, notify you.
Specify up front when and how you want to be reached and for what reasons to ensure smooth communication processes.
It’s important to ask questions when hiring a property management company. Knowing what questions to ask your property manager is a large part of finding peace of mind.
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The information provided is given as a resource and is deemed reliable but not guaranteed.