If you think about all the ways a property management company will represent both you and your valuable investment, it’s worth spending a little extra time during the interview process. Having a quality property manager can significantly lessen the daily stress of managing a physical property and communicating with tenants—but only if you hire the right team.
If you skimp on a property manager because of price or because you feel pressured to get someone on the job fast, your shortsightedness could come back to haunt you. In fact an incompetent or inexperienced property management company could actually add to your workload by involving you in too much of the day-to-day dialog, not having an established network of contractors, not understanding real estate legalities, and the list goes on.
The best thing you can do when hiring a property management company is to know the right questions to ask during an interview and to make sure you sit down in person with no less than three different companies to see who’s going be the right fit for your single-family home or multi-unit property.
Here’s a little cheat sheet of 10 important questions to ask to guarantee you end up with the right people on your side.
1| What are your fees?
Make sure you are getting a straight answer on this critical factor. If you’re not sure, follow the first question with, “OK, what other fees do you charge? Okay sure, but what else are you not telling me?”
2| How will you market my property?
Make sure you leave knowing the exact venues this company will list your property on and other key issues like whether or not they use professional photography.
3| What criteria are used to qualify applicants?
This list of items should match the one you already use or be more extensive than your own. It’s worth reviewing the document during the interview and inquiring about any discrepancies.
4| What’s your pass-through cost for maintenance?
Follow up with, “I understand you are telling me that you pass on third-party maintenance at cost or with a clear fee of 10%, but what are your vendors really charging you on the backend?”
5| How does your lease protect me from potential liability?
Your property management company should be well versed in lease agreements and the legal implications of renting all types of property in your state and city.
6| How do you handle emergency maintenance?
As a property owner you know that this is one of the top concerns for both tenants and owners. A quality property management company will have a system in place for handling a potential crisis. This could make or break your relationship.
7| Who owns the property management company?
It’s important to know who you’re really dealing with, such as a local mom-and-pop shop, a subsidiary of national chain or a company that owns affiliated service companies.
8| Do you have a background in real estate transactions?
If you decide to sell your investment property and buy something new during your contract with the property management company, can they assist with this transaction? Ask them to provide past examples.
9| What are you going to do to maximize my income?
If they’ve been in the business for a long time, a property management company will come to the table with some creative ideas for increasing the profit potential of a property of any size.
10| Are you interested in a long-term partnership?
“I understand you have a fiduciary interest to your clients, but how do I know you are not simply interested in short-term profit for your company?” Phrase it however you like, but make sure you’re getting a business partner who’s in it for the long haul.
These are just some of the top questions that can help you determine the best fit for your property investment. You will likely have some of your own or need to adjust these depending on your individual requirements and capacity. But we hope these questions will at least get you thinking about the importance of securing a quality property management company.