How to select a property manager?

Question

I have been hunting for a property manager in my area with minimal luck. However, I found a person who seems to fit the bill, however he found me on Facebook. I can't seemingly figure out if he's legit or a con artist. The things he say sound reasonable (price, ideologies and the like) so it seems a bit fishy. Is there any surefire ways to filter these people?

Slaiman Atayee · Answer

Any reputable PM should have a website with reviews from other clients (e.g., google, yelp, angies list). Even then you should have a list of questions prepared to ask them to ensure they have the right processes in place, have reasonable markups on repairs, and can handle additional units (see example list below). I'm not familiar with your area but I'm sure you could get some recommendations from people on BP.

• How long have you been in business and how many properties are you managing at the moment? How many people work for your company, and what are their roles (summarize)?
• What systems do you use (e.g., rent collection, property management)? Can you provide a monthly P&L report from your system?
• How long does it take you to turn a property around in between tenants? Will you advertise and show a property while it is occupied, or do you insist on properties being vacant before you will start advertising them for rent? Do you offer a tenant placement guarantee?
• How often do you check in on tenants and properties? Do you do an annual walk-through?
• What do you charge for evictions?
• Do you conduct credit and criminal background checks on prospective tenants?
• What is your philosophy on tenant selection, getting properties rented? Do you try to get top dollar and raise rents aggressively or do you prefer more of a value play?
• Do you take photos of the property before and after move in and out?
• How do you handle tenant calls for repairs? Do you try to solve the problem before sending out a repair person? Do you establish a threshold dollar amount on repairs above which you always call the owner? If so, what is that dollar amount?
• Can you provide at least 3 past landlord references?

Melanie Thomas · Answer

Hello! I would recommend you start your search on the NARPM website. There are a ton of amazing PM's affiliated with the National Association of Residential Property Managers. They are held to a very high standard and suggest you check the site out. Happy to help you navigate if you have any questions. Happy Investing, good luck!

Patricia Steiner · Answer

Bolt.  Facebook is way too stranger danger for something as important as property management.  There are a lot of people who would like to take over your property for reasons other than protecting your investment and maximizing your return.  Vetting is everything. Licensing is creditability.  I would start by considering properties in the market area that appear to be well managed by your standards. Then contact that owner (you can find that out at the Property Appraiser's website) and contact that person for a recommendation. You can also look at rental listings in that market to see the quality and criteria set and then contact that PM for details.  I would only hire licensed professionals so that you have a big stick if they fail to perform by filing against their license.  Please be extra careful and do the work to find the right PM.  You may also want to consider quasi-self management which my clients and I employ that is achieved by automation and ensure you retain control.

Best...

Drew Sygit · Answer

@John Kaspar

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

How to select a property manager?

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