Finding The Right Property Management Company

[Seth Williams]

Finding the right property manager is a big decision that will have a HUGE impact on the success (or lack thereof) of your rental business.

In my conversations and experience with a number of property managers, I've found that some of them are EXPERTS who are very good at what they do, while others are total amateurs... the kinds of people you should be afraid to do business with.

So how do you find the right property manager?

When I first got into rental properties, one of my colleagues (her name is Renee) shared a system with me that she developed for finding and screening property management companies. It boils down to a series of informative questions that reveal how qualified a management company really is, and how effective they are likely to be at managing your particular property.

I used these exact questions to find my current property manager, and they worked like a charm. I was able to screen them and thoroughly understand who I was dealing with, and I couldn't be happier with the result.

If you're looking for a property manager and you don't know where to start, I'd suggest contacting a few different property managers and asking them the following questions...

General Background:
• What type of properties do you typically manage? (single family homes, apartments, commercial, etc.)
• How many units does your company currently manage?
• How long have you been in the property management business?
• How many rental properties do you own personally?

Regarding the property you intend to purchase:
• What areas of town are good rental markets that seem to have a low vacancy rate?
• If you were to invest in a property right now, what areas/neighborhoods would you focus on and what type of properties would you go for? Why?
• What is the average vacancy rate in this area?
• What is unique or special about this area? Are things getting better or worse? Does this strike you as a good investment property?

Management Related:
• How many people are on your staff? Describe how your company’s work is divided and/or the number of units each person manages.
• Describe your tenant screening process.
• Describe your eviction process from the first day rent is late.
• What is defined as the tenant’s responsibilities in the lease agreement? (cleaning, furnace filters, yard care, etc.)
• What limit is set for your property owners to approve expenditures?
• Are repairs/maintenance paid at cost, or at cost plus? (marked up)
• Describe the ways you are able to improve an owner’s profit. (increase rent without losing tenants, share late fees, etc.)
• Describe your fee structure and what is included or excluded. (advertising, leasing fees, etc.)
• Can I see a copy of your paperwork/reports/lease agreements?
• Request 3 references.

[Paul Falbo]

I agree, it is a very good list.

I would also suggest that you might ask:

Do you carry E&O insurance? Employee theft and dishonesty?
How often do you provide written reports? May I have a copy of a generic report?
Can I review a budget form you use for your clients?
How long has the property manager you plan to utilize on my property been with your firm? Who will serve as backup in the event that the manager is out of town or sick?
Are you licensed? Your employees?
How do you handle maintenance requests? Do you have regular vendors and do you bid out major repairs or capital expenditures?
What associations do you belong to?
Do you pay for your employees' education, or continuing education?
Do you require vendors who provide services on the property to carry their own liability and workman's comp insurances. Do you have a contract you use for such services?
Do you work with a local attorney, and if so, what is the hourly fee?
Do you have in-house maintenance personnel? What is your rate?
How many times a month will you visit the tenant/property?

I would also ask for a couple of houses/properties managed by the firm that you could visit to see if their idea of a good job meets your expectations.

Or you could ask why you should hire them; and, see how many items on your list they include in their response without prompting.....