Find a Great Property Management Company
When landlords find their daily workload has become too much to bear, they have two choices:
1. bring more staff and grow the business in order to make the workload manageable
2. hire a property management company and outsource everything.
Most landlords have staff on payroll already however and may decide instead outsource portions of their business. One problem with that scenario is in outsourcing the wrong tasks and hanging onto the most work intensive.
When work is outsourced, the business must still come down to operating with a modern, staff friendly property management platform. It is the foundation of today’s property management firms. It’s all about efficiency. You may find you only need new software, and that hiring a service firm is not the right way to go.
However, if it is time to outsource, you’ll want to take these precautions and use these insights into a high quality provider below.
The Management Value Proposition
The management firm’s ideal value proposition is pretty clear: expertise, trained service staff, contractors, responsive service, and hopefully automation technology to help service your properties well. They may be a certified member of NARPM and hold other technical certifications that bring peace of mind.
All the tasks that weigh you down include administration, payment collection, maintenance, repairs, tenant acquisition and screening, marketing, along with tenant communications might be resolved by hiring property management firm.
Finding the Right Company
What separates highly valuable service firms from those who might damage your business? There are hundreds of potential companies to hire in major cities from Los Angeles to Boston to Miami. Yet, of those, only a small selection possess the training, skills, certifications, tools, staff, technology, and ability to service your properties well.
Why are You Hiring a Property Manager?
- to leverage their expertise and experience
- improve marketing and acquire new, well-screened, and qualified tenants
- set the right rental price for the road ahead
- manage your properties more efficiently to retain and improve investment value
- manage growing number of rental properties
- meet government tenant guideline
- leverage property management automation processes
- improve contractor/vendor management and reduce maintenance costs amid inflationary trends
- to launch a pay for performance model to ensure higher profitability
Choose a Better Property Manager
There’s more to the best service provider than credentials and experience. Some modern property managers have upgraded their tenant services, marketing, and maintenance administration using property management software.
Our Listing of Firms Near You
Our growing list of property management firms below includes providers in California, Arizona, South Carolina, Nevada, South Carolina, Hawaii, Florida, Colorado, Washington, Illinois, and Massachusetts
10 Key Areas to Screen For
What makes the best property managers worth their weight in rent money? Here’s 10 areas to investigate with some questions you should be asking.
- Property and Tenant Marketing : As covered in the post on Tenant Advertising, your property management professional may be able to target and lease to high quality tenants that pay on time and respect your rental assets. Ask the prospective manager how they manage tenants from start to finish — including communications, setting the right rent price, handling rent payment delays, and have them verify their tenant retention rates. Where do they advertise, what rental listing sites do they use, what does their website look like, and do they use the MLS? What is their current vacancy rate? What is their cost per lead? If they’re on top of these things, they may be a competent property manager.
- Tenant Screening: The task of tenant screening is vital since nightmare tenants can ruin your business and cash flow. Ask them about the top 3 questions they routinely ask tenants which might be: who are your previous two landlords, why did you leave previous rentals, and why is this rental so important to you? Yes, use credit checking and renter background checks, but ask them what they do to mitigate the limitations or errors in these reports.
- Tenant Onboarding: Greeting tenants, showing the suite, writing leases, getting them amended and signed, informing them of their obligations in the home, helping them get settled, and arranging rent payments. Yes, respecting and educating tenants takes time and is important.
- Tenant Communications and Relations: Check the quality and frequency of their communications with tenants. Ask them to elaborate on tenant retention strategy. Read their reports and ask about specific tenants to verify that they really do keep in touch and ensure concerns and requests are handled effectively. If they have tenant software, you may be able to verify by seeing those records. Ask to speak to at least 3 of their tenants from different homes or buildings. Do you believe they will be good for your tenants? Do they speak respectfully and professionally? Are they friendly?
- Are they Tech Savvy? Property management and landlording are undergoing big changes due to digital technology tools such as landlord apps, property management apps, accounting functions, and online services.More property owners, landlords, and managers are utilizing software. Find out how they handle maintenance tickets from tenants. Are the software apps simple enough that owners, tenants and contractors feel comfortable using them? Check the software platform they use and the reports they prepare. Are you comfortable with them or are you confused and confused by the detail?
- Property Inspections, Maintenance and Repairs: Do they know their housing and mechanical systems? Ask them to describe their property maintenance and repair program. Does it all sound too good to be true? Check their maintenance schedules and assess what was done. Ask them about specific high-risk equipment issues and how they prevent problems. Ask to view their properties managed and check out the quality of the work. Ask to see what was done, fixed, or replaced and why.
- Rent Collection and Late Payments: How do they accept rent from tenants: checks, etransfer, bank transfer, PayPal, or other electronic payment processors? Review payment records and note how late the overdue payments were. Ask them how they handled specific cases of rent default. If they’re managing a budget and large funds, are they bondable?
- Contractor Management: Contractors can steal your money, produce shoddy repairs, not maintain the property, and create disasters. Ask about who the most reliable professional contractors are which they use and why they chose them. Ask about contractor problems, ask for names and company names, and how the problem was resolved, or if it actually ever was resolved. Investigate these contractors on your own to gauge whether you feel comfortable with their professionalism and prices.
- Property Management Fees: What are their yearly fees and what risks are there for you if something goes wrong? How do they structure their fees? Do they charge by the property? Will they take responsibility for late payers or a default? How much will they charge if you add 3 to 10 more properties?Additional Screening Criteria:
- Do they have property manager insurance and have made a claim? Do they provide detailed owner reports and income reports?
- Do they break their property management fee down into type of property and a percentage of rent? It is usually 4 to 12% of monthly rent but could be up to 20% for small portfolios. You might want to build in a performance penalty/bonus to test whether they’re confident of their skills. Ask them if their fees are billed or deducted directly from owner accounts.
- Do they need a reserve fund or maintenance fees up front? Do they notify you beforehand on maintenance/repair work of more than $500. How do they protect you from contractor fraud? Do they have their own contractor crew and how do they charge for that service?
- Do they charge a fee for serving notices, dealing with attorneys, court appearances, evictions, etc.
- How much is their leasing fee? 30% to 100% of first month’s rent is normal, however can they guarantee quality tenant results? Will they agree to a penalty if they bring in a tenant that leaves within 12 or 24 months? If you find a good tenant on your own, do you still pay the leasing fee?
- What is the term of your agreement and how can it be terminated? What are the fees if you cancel early?
There are plenty of fees they could charge you so it’s best to know beforehand how much that could all add up to, before you sign a property management contract.
10. Property Management Experience: What properties have they managed: houses, condos, large apartment buildings? How long have they been in business? What are the qualifications and experience of their current staff and contractors? Visit some of the properties they currently manage. Ask them to elaborate on a variety of experiences with tenants and owners and keep plumbing for common themes. Ask pointed questions about troubling things, just to see if they try to avoid that line of inquiry.
Who are their full staff? What experience and qualifications do they possess? What do you think of the diligence of those team members?
How to Decide on your Next Service Provider
There you have 10 areas of concern to drill down on. Some would call this common sense, but there’s enough complexity here that you could be on the hook for some substantial financial losses. Ask yourself what is the worst that could happen. That might motivate you to be particular.
In the final analysis, you need to assess accurately what they are worth in dollars and whether they will take care of the property and your tenants. They should be able to present you with a quantifiable report on their success and but not something that looks like a press release or brief summary of accounts.
Add up all the fees that might apply to your current and projected future tenants over 5 years. How much will you need to raise rent to cover these fees to protect your property investment ROI? Will your ROI grow?
Reliable, Trustworthy Property Managers
Reliable, trustworthy property management companies will be as transparent as they can be with you. During interviews, the usual strategy of ensuring they are meticulously honest and forthright is good.
And business references are also okay but keep in mind that everyone has a few prepared/coached references who will speak well of them. That won’t really help you.
Instead, through your conversations and inquiries, and lots of questions, you’ll learn more about why former property owners did or didn’t work out. There is a reason, and it might be either budget or technology that’s the issue.
If they had property owner clients that didn’t work out, it might only suggest they took on the wrong clients out of financial pressures. So are they doing that with you? Their philosophy of customer first is critical because your tenants are your financial lifeblood. A little extra charge isn’t important if your big picture is taken care of.
Property Management Firm Listings
In need of a property management firm near you? Get your sourcing started with:
Good luck with your search for a suitable property management and maintenance services provider. The right choice could make 2022 a breakthrough year for you.