Good questions to ask out of state property mannagers?

[Andre Brock]

Hey guys just  creating some dialogue but if you were going to buy and hold in a new market what would be some great questions to vet a property management company?  looking to line up some possible property management companies in Milwaukee to work with in the near future.

Thanks 

[Marie Thomas]

Quote from @Andre Brock:

Hey guys just  creating some dialogue but if you were going to buy and hold in a new market what would be some great questions to vet a property management company?  looking to line up some possible property management companies in Milwaukee to work with in the near future.

Thanks 

@Andre Brock Hey there! I am not an investor in Milwaukee however I have spoke with property managers in my market to get an understanding of what the process would look like and these are some of the questions/ criteria worth considering! Hope it helps! 

1. Experience and Expertise:

- How long have you been managing properties in Milwaukee?

- What types of properties do you specialize in (residential, commercial, multifamily)?

2. Services Offered:

- What specific services do you provide (tenant screening, rent collection, maintenance)?

- Do you handle evictions and the legal aspects involved?

3. Fees and Contracts:

- What are your management fees and how are they structured (flat fee, percentage of rent)?

- Are there any additional costs for leasing, maintenance, or other services?

4. Tenant Screening Process:

- What criteria do you use for tenant screening?

- How do you verify income and background checks?

5. Maintenance and Repairs:

- How do you handle maintenance requests from tenants?

- Do you have an in-house maintenance team or do you use third-party vendors?

6. Communication:

- How do you communicate with property owners regarding updates or issues?

- Will I have a dedicated property manager or rotate through a team?

7. Performance Metrics:

- What metrics do you track to measure the performance of my property?

- How often do you provide financial reports to owners?

8. Vacancy Rates and Rent Rates:

- What is your average vacancy rate for properties you manage in the area?

- How do you determine the appropriate rental rates for my property?

9. Legal and Regulatory Compliance:

- How do you stay updated on local laws and regulations affecting property management?

10. Termination of Management Agreement:

- What is the process for terminating the management agreement if I’m not satisfied?

- Are there any penalties for early termination?

11. References and Reviews:

- Can you provide references from other property owners you manage for?

- check their online reviews if any 

12. Local Market Knowledge:

- What can you tell me about the Milwaukee rental market trends?

- Which neighborhoods do you recommend for investment, and why?

[Adam Bartomeo]

You should ask a host of questions about how they handle situations and the systems in place - rent collections, maintenance, evictions, vacancies, etc. This will give you insight into their experience, expertise, and knowledge.

[Andre Brock]

Thank you Marie all great questions I will definitely use. 

[Andre Brock]

Thank you Adam great points and insight to ask about. 

[Danny Gonzalez]

@Andre Brock

Great question! Vetting a property management company is crucial for protecting your investment. Having owned a property management company for 5+ years and managing over 300+ units, here are a few key questions I’d recommend asking:

1. What’s your process for collecting rent?

• Specifically, ask “What happens if rent isn’t collected by the 5th?” This will help you understand their approach to late payments and how quickly they take action.

2. How do you handle evictions?

• You’ll want to know their eviction process, the timeline, and if they handle everything legally on your behalf or hire it out to a local attorney.

3. What’s your maintenance process like?

• “Do you have in-house maintenance, or do you subcontract?” Make sure to ask how quickly they respond to issues and how they communicate with you regarding repairs.

4. Who will be my main point of contact?

• It’s important to know if you’ll have a dedicated manager or work with a team to ensure there’s clear communication at all times.

These questions will give you a solid understanding of how they operate and if they’ll be a good fit for your portfolio.

Best of luck lining up the right PM team!

[Drew Sygit]

@Andre Brock

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😊

[Andre Brock]

@Danny Gonzalezthanks very helpful and insightful.

[Andre Brock]

@Drew Sygit

Thanks drew really appreciate the knowledge.

[Rebecca Knox]

I'm in Milwaukee and I've used Citywide Rentals & Property Management for the past several years. We have a very good relationship with the owners however, if we didn't use them, I'd use Welcome Home Milwaukee or MKE Leasing as both get rave reviews from fellow investors and also am friendly with the owners of both. 

These were some questions that I was given in order to interview a property manager:

Basic Questions:

• How long you have been in business?
• Are there any other company names you have done business under in the past?
• Who are the owners of the company?
• What awards or accolades have you earned?
• # of employees
• Are you the largest Property Management Company in your area? If not, who is?
• How many properties / doors do you manage?
• How many Investors do you manage properties for?
• How many of your Investors are out of state?
• What class of properties do you manage?
• What class of properties will you not manage?
• Global Occupancy Rate
• Last 3 months Occupancy Rate
• Avg. Length of Stay per Tennant
• % of the rents collected by the 10th of each month
• Avg. length of time from closing on the house to the day a client gets a check (if in a turnkey situation)
• Avg. Rehab Time
• Avg. Cost of Rehab
• Avg. Initial Tenanting Time – ie the first time a house is rented after rehab is complete
• Avg. Length of Tenant Rollover- ie how long does it take to re-rent a property
• Avg. Cost of Tenant rollover (after the security deposit is applied)
• Avg. Security Deposit amount
• Avg % of Security Deposit returned to renter
• Eviction %
• Avg. Length of Time Per Eviction
• What is the Eviction Process in your State?
• % of the Gross rents allocated to maintenance in the past 3 years
• # of Global turnovers of portfolio under management

Marketing:

• What is your marketing strategy to find quality Tenants?
• Do you have internal staff that handles the marketing for tenants or do you rely on outside rental agents?
• What % of applicants do you approve to become a tenant?
• Where is the Lease Agreement signed?
• Is the signing of the Lease Agreement recorded?
• Do you run background checks on your tenants?

Costs:

• What is your monthly fee?
• Do you charge a monthly fee if the house is vacant?
• What is your Tenant Placement fee?
• What is your upcharge on maintenance issues?
• Do you allow a maintenance retainer to be held in escrow?

[Shane Franke]

Hi @Andre Brock we service the greater Milwaukee area, DM me for more details, thanks

Shane
Acero Property Management

[Chaim Lampert]

@Andre Brock seems like there are a lot of good suggestions on here. Another potential question to ask would be if they use a comprehensive property management software and if they stay up to date with technology.