What Questions to Ask/Things to Look for When Interviewing Property Managers?

Question

Helo Bigger Pockets folks! A couple of years ago there was an excellent long article on BP about all the things to look for and ask when interviewing property managers. I think it was written by @Nathan Gesner, a property manager from Wyoming.

Does anyone know where I could find this or a similar overview for property owners? Thanks in advance :)

Michael Smythe · Answer

@Tricia O'Brien a list of questions is almost useless - unless you can VALIDATE the answers!

Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

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, they often select the first PMC they call or that calls them back!

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!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

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😊

Tricia O'Brien · Answer

Hi Michael,

Thanks for responding to my post. Great advice! Especially about validating information.  I have a few follow up questions:

1) What's an example of "get referrals and cross reference them to get as much accurate information as possible"?  Would that be, for example, if the PM says, "I manage a duplex for John Smith in Turlock," then I call John as a reference, ask John a few questions, and then ask John the address of his duplex so I can later look it up on the county website and verify if he is the owner?

2) I have on single family home (rents for $2100/month) that needs a PM.  Is it realistic to ask for and expect to get at least 2 landlord references and 2 tenant references (current clients) if I am a " small time" landlord with one property, not multiple units?

Thanks,

Tricia O'Brien