Hiring Property managers

[Daria B.]

I have a pretty good questionnaire that I use to interview property managers. It's simple and gets to the point of the important things that I look for and want in a PM.

Recently, I came across a situation and wanted to know if this would be unfounded to do.

For those that utilize PMs, have you ever hired a PM and had as part of the contract that if they are not able to get the property rented in x days that you the owner have the right to terminate the contract? In this example it relates to hiring a new PM that is not managing any of your properties and you have one that you just bought and want them to manage and get rented.

In the contracts that I have with my PMs it simply states that either party must give 30 days notice to the other if they want to terminate. I have also "never" stipulated when I hired them that they had x days to get it rented or I would get another PM. I enter into the agreement with the thought in mind that they are qualified until I see they are not qualified. 

I've only had to switch PMs one time. I hired them and they prooved in 4 months after ring hired that they were incapable of performing the job. But that's a story for another time. :)

[Mark Ainley]

@Daria B.If leasing is the concern take the management company for a "test drive".  For our management operation in Chicago Suburbs when we have a new client that approaches us for management & leasing we have them hire us first for leasing.  We go thru all the questions about management in advance but we won't make them sign a management agreement until we have worked together thru the tenant search process and the new client is comfortable with our team. This period of time shows to the prospective new management client our drive, our talent, members of the team, and our communication.  A few weeks later when we secure a new tenant it is a no brainer for the new client to move forward with us for management. 

Great list but let me add a couple more for you: @Doug Johnson

1. How many times have clients canceled management service with your firm in last year and hired a new manager?(can be worded to be a little less rough)

2.  What is the average lease term for tenants you manage?

3.  Would you allow me to see your operations procedure manual or file?  (You might not have to actually see it but how they respond to this is key)

4.  How fast can you turnaround a vacant unit from move out to rent ready status?

5. Turnover is costly...what is your procedure for renewals?

6. Has your company completed any tenant or owner customer service surveys that I can review the feedback on?

7. Can you tell me more about your team and the individual tasks(hopefully they have a team)

8. Do you report good/bad payment history to the credit agencies?

9. How much maintenance and turnover is out sourced vs done in house by staff/employees?(this is a huge question.  The difference between a 7% and 8% management fee is nothing compared to a company that controls 90% of maintenance cost vs using third parties for 90%.)

There are many other questions that you can ask based on KPIs and their responses or lack of ability to answer will show a lot.  These are just some questions of the top of my head but these are questions I encourage owners that interview us to ask our competitors.