How to Choose a Property Management Company
It’s an entirely personal decision whether a landlord decides to manage his or her own properties or hires a property management company to do it.
Property management firms exist because there is a demand for their services. And they charge for them. Only each landlord can decide if the service is worth the fees and possibly lower profit margin.
If you have found that managing your own income property is not one of your stronger skills, there’s no harm in researching property management firms. Check out several, ask your friends in the rental business for their recommendations, and have a list of questions ready. Here are a few to help you narrow down your choices:
- What are your fees? What do they include?
- What would trigger an extra charge?
- How will you advertise my properties?
- How do you handle maintenance? Do you mark up materials and supplies?
- What is your procedure for showing a unit that is for rent?
- What options do you offer my tenants for rent payment?
- How do you collect delinquent rent?
- What about maintenance emergencies?
- How will you prepare a unit for leasing after a tenant moves out?
- How do you prescreen tenants?
- How will you enforce my rules?
- Why should I hire your company?
- How does your insurance cover me? What about bonding?
Be sure to ask for references—and follow up on talking to as many as you can. You might hear three glowing reports and be tempted to stop—but number four could have information you really must hear. Consider finding a few clients that are not on the company’s reference list, since they’re not likely to provide you with a bad reference. Ask around.
Visit the offices of the management company and observe how they answer the phone, interact with tenants and property owners, and meet the person who will be handling your account. Establishing a rapport will smooth your interactions with him or her.
Before you sign any contract, know what you’re getting into. The way a property management company answers your questions will reveal a lot about how they will work with you. Choose a property management company that will look out for your best interests.