How to Interview a Property Manager. What questions to ask?

Question

I am new here and tried to search this topic, but just found 600+ pages of people asking for certain Area recommendations. That is all well and good, but I want to know how to interview them myself. I live in the Chattanooga area and if someone recommends someone who is great that is awesome and I would love to interview them.

I currently don't own any rental property in the area yet, but I'm selling a 5 unit in Maryland in a couple weeks and I want to get started locally. I have managed my own rentals for the past 8 years and it was a great learning experience, but going forward I want highest and best use of time. I want to acquire and grow quickly so if I can put the processes in place right out of the gate, scaling should be easier.

I am looking for a management company who will be proactive and schedule painters and contractors prior to a tenant moving out. I want someone who will line up new renters so we never have more than a 30 day vacancy EVER. I am looking for someone that will care about my properties as I do and not just collect rent each month. I would like to have zero tolerance policies and keep me in the loop with possible issues. Someone to handle all of the maintenance requests and have a Rolodex of great contractors and handymans to make small repairs when needed. I don't know what a good manager costs. What is normal for their services? What is a deal? Individual or company? Should I get a multi unit discount and how much?

Is there a write up that anyone knows of or a recording or a blog posts of what a great interview should sound like. Even a questionnaire template that I could email to someone to get a good background vetting before we meet face to face.

Thank you everyone for any input you may have on this matter.

Nicholas Cook · Answer

@David Hanson

I would determine how hands off or hands-on you want to be. This will help you find the right provider.

1. If you want someone proactive, ask them what they do when they get a notice to vacate? What is the process to re-rent the home as quickly as possible. I do think it is unrealistic to assume you will not have a vacancy of more than 30 days. There are a lot of factors outside the managers control that can impact this such as you being reasonable about the price and being hands-off.

2. As them for their top 3 vendors in each  category such as plumbers, electricians, etc. this will show if they have preferred vendors.

3. I would ask if they have in-house maintenance. This is a major advantage in most cases for turn speed.

4. I would ask what kind of work flow software they use such as ProcessSt, Trello, etc. This will let me know how they run systems. Do they use cloud platforms or paper?

5. I would ask what sort of enterprise software they use e.g. Buildium, Appfolio, Yardi, etc.

6. I would ask about their ratio of property managers to doors/units.

7.  I would read online reviews. These days both owners and residents look at reviews when deciding to work with/rent from a PM company. Now it is important to keep in mind that management companies will have negative reviews from time to time because they charged someone a late fee or a resident didn't get their deposit back. For this reason you want to look for a trend. Do a lot of people say they don't call back or that they have poor maintenance?

8. You want to work with someone who is part of a professional association as this is a signal that they are interested in building and following best practices. Some organizations are the Institute of Real Real Estate Management (IREM) or the National Association of Residential Property Managers (NARPM).

9. Personality and communication style are big. You are going to be working with this person for usually a year if not much longer. It is important you feel like you can have a good relationship with them.

10. I would ask how they handle security deposit accounting and what methods they use to ensure they can charge a tenant properly for damages at move-out.

11. I would ask about the leasing process and how many days a week they show property as well as where they advertise?

12. I would ask them to describe their differentiating factors. Why choose them?

I hope this helps!

Account Closed · Answer

The only way to be sure they care about your profits, is if they are your employee.  Hire an assistant who doesn't profit when there are problems.

If you're determined to hire a PM, really read the contract.  Look at all potential fees and expect to pay them all.  Don't believe them when they say it's standard and they'd never really charge you all of those fees.  If they don't intend to charge you the fees, then ask them to remove them from the contract.  Or expect to pay them all, and expect the absolute worst case scenario - where they deliberately find a bad tenant and charge you a fee for doing so, then they charge you fees for dealing with all of the problems with that tenant, and they charge you for a ton of repairs that weren't needed or were overpriced, then they charge you fees to get rid of the tenant, then they charge you fees to find another bad tenant - and then when you decide to fire them, they charge you a fee to fire them.

If all of that sounds like fun and a smart business decision and costs you're ready to part with, and can still make a profit that you're happy with....then hire a PM.

Or, manage your own properties and stay in control and keep all of your profits.  And,, maybe hire an assistant you can give a bonus to when you make a profit, and who you can fire if they don't do a good job, without breaking your bank account first.

David Hanson · Answer

@Joshua Diaz

Thanks I did not see this but this is exactly what I was looking for!

Joshua Diaz · Answer

There is a lot of good info here about hiring an assistant to manage for you.  But if you are looking for an established property management company, I came across an article on BP recently that may help.

https://www.biggerpockets.com/renewsblog/2015/10/0...

You may have already come across this but if you haven't, I hope it helps.

All the best!

Cody L. · Answer

I don't use property management companies.  I own my own PM company that exists to manage my portfolio.  My individual managers make about $20/hr but can make 2x that much in bonuses (I like comp plans that are heavy on performance based bonsues vs. high hourly.  If a manager wants high hourly vs. high upside from bonus structure, that's another huge red flag to me)

David Hanson · Answer

Account Closed

So I used to manage my own rental in Maryland while living in TN and it drove me crazy. I think maybe I was simply too nice. Perhaps with a better understanding of how to make clear protocols and what will be accepted behavior up front would make this easier. I constantly had tenants texting me complaining about behaviors of other tenants and them moving furniture that I supplied in common areas. Basically tattling on each other and I would have to play mommy. Drove me insane.

Could someone tell me how the conversation should go when you self manage and they first move in to make life easy on me and keep the tenant happy? Is there paperwork that you have them sign that lays out all of the rules and standard best practices for reporting issues and what is an issue, what is an emergency, and what is deal with it yourself topics?

Ideally I would love to just setup a simple website or even a google form that they could fill out and let me know of any issues. Once I have 5+ doors maybe hire a VA that can even answer a local google voice line during business hours for emergencies and even have them call the necessary contractor for issues. Just keep me out of it unless its above a certain priority level.

Account Closed · Answer

I think, and it was my personal experience, that it's not possible to effectively manage property you can't personally get to when necessary - so it's my opinion that buying out-of-state, or out-of-area rentals is a really bad idea.  It didn't work for me or anyone I personally know.

And I'm not surprised you sold it, as you indicated in a later post.

I think people who buy rentals out of state or area are nuts, and I seriously doubt any of them make any profits. I also believe that it's really rare for any of them to own up to the huge mistake they made anywhere like here on BP.

But, let me say that I tried to do this, and lost my shirt, the property was foreclosed on and I had to file bankruptcy - on a rental I had out of state.

I think it's really foolish.  And I think people forget the old wise adage that if something sounds too good to be true - it is.  It's a gambler's mentality, which is always foolish, to think that a tiny investment will make a large profit, especially when there are a whole bunch of fingers in that pie.

David Hanson · Answer

@Trevor S Foster

Thanks, but my rental will be sold next month. Thanks for reaching out!

Trevor S Foster · Answer

@David Hanson Hey, I currently live in Gaithersburg, MD & although I don't have the experience in property management it's something I've been open to. If you are still looking for a PM, please contact me so we can talk directly about your needs, the properties you want to be managed & how I can help.

As I stated I don't have the experience in PM but I can send you my resume, current employer info for a reference/background check & anything else you may need to make a decision.

I'm looking for different opportunities to get my foot in the door & maybe we both can hit 2 birds with one stone.

I currently work for a materials company that caters to building professionals & deal with contractors on a daily basis, in which Ive created great relationships with over the past 2 1/2 years. I say that because I have access to just about every different contractor you can think of.

Again, I can provide my resume & current references to my FT job to show my character & work ethic. I'm just looking for an opportunity to show what I can do.

How to Interview a Property Manager. What questions to ask?

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