How to choose a Property Management Company
So you’re thinking about hiring a property management company for your Investment Property rental.
A question you might have is — why shouldn’t I just do this myself?
While there are owners who handle management themselves, it can be incredibly time-consuming to lease your rental, field potential tenant inquiries, take quality photos, write and revise the listing, answer questions about your property, vet potential tenants, juggle on-the-ground services like cleaning and maintenance, and follow ups. Once your Investment Property is leased and rented, then you have rent collection, Tenant issues, maintenance issues, tenant calls, Tenant questions, being on site for service calls and proactive maintenance.
There’s a better way. Hiring the right property management company for your home can take the stress, endless tasks, extra time, and marketing responsibilities off your plate.
But before you hire a traditional or local property manager, make sure to ask these questions to know you’re getting everything you need.
1. HOW IS RENTAL PERFORMANCE IN THE AREA?
You’re looking for a manager who has a good feel for the local market. A great property manager will know the ins and outs of your location — competing rates, what types of property are most popular in the area, and how local regulations and trends are affecting rentals.
Ask your potential manager questions about the local market and feel out their responses.
If they seem uncertain or their answers seem off, you may want to keep looking.. And don’t base their experience on years in the business. There are quite a few long-time property managers out there who haven’t kept up with changes in the industry and don’t perform well as a result.
2. WHAT ARE YOUR FEES AND CONTRACT TERMS?
Contracts are the biggest sticking point for owners who have wound up with a poor property manager. If you figure out in the first two months that the property manager isn’t doing their job well, but you’re locked in for a year-long contract, you’re going to be very unhappy for the remaining ten months of that year. You’ll also want to know the payment terms and timing. Some managers can take months to pay and, if you’re caught in an unfavorable contract, it can be a long time until you get paid.
Above all, make sure any fees and agreements help you build an investment business that prioritizes a value added Investor experience.
3. WHAT SERVICES ARE INCLUDED IN YOUR MANAGEMENT FEES?
You’re hiring a property management company for the high level of services they provide. You’ll want to know exactly what services are included in their fee.
Specifically ask whether the fee covers marketing, photography, writing the listing, updating the listing, observing market trends, cleaning, maintenance, pre-move in walkthroughs, or in-person visits for any issues that arise.
You should also ask about any services that are not included in their fee – for example, some property management companies will charge an additional fee if outside of business hours to address a problem the Tenant is having.
4. HOW DO YOU MARKET MY PROPERTY?
This is an important one. Ask them how and where they’ll market your property when Leasing to new Tenants.
Many rental management companies prefer to market their clients’ properties only on their own website. These days, that’s not enough. You want to be on all the major websites with highly professional listings. No matter how popular a local manager’s site is, it’s never going to get the same amount of traffic as major online listing sites – which means you’ll be missing out on a lot of potential tenants if you’re limited to one website. Make sure you understand their marketing plan.
Marketing is a big word that includes the photography of your rental, a high-converting property listing, framing your rental for the market, and how it is promoted.
5. HOW OFTEN CAN WE EXPECT UPDATES ON OUR PROPERTY’S CONDITION?
After every Tenant departure, you should confirm that the previous tenants left your property in good condition and that any accidental damage was documented and addressed. Be sure to ask your potential property manager how they handle issues after a tenant's departure.
You’re looking for a manager who performs post tenant walkthroughs, takes photos of any damages for your records, and takes steps to bring the property back up to good condition for the next tenants.
Your property manager isn’t expected to pay for damages out of pocket – that cost should be accounted for in your operating budget, though a good property manager should be taking steps to charge back any repairs that are over and above regular wear and tear.
IT’S TIME TO RETHINK INVESTMENT PROPERTY MANAGEMENT.
The traditional models of property management are outdated. Doing it yourself is a LOT of work and, as we’ve covered, working with traditional property management companies means less control with fees that are hard to justify.
Professional Property Management protects your Investment, gives you access to online communication and transparent accounting and is focused on building great relationships with great Tenants who will care for your property. AND it is a 100% tax deduction! Free up your time, reduce your stress and let the professionals support the success of your investment.