Finding a reliable and trustworthy property management company is one of the most important decisions a property owner can make. A good property manager is essential for maximizing your rental income while minimizing headaches and hassles. Here are some tips for choosing the best solution property management company to manage your investment property.
Research Local Property Management Firms
Start your search by looking for established property management companies in your area. Look online, check with your local apartment association, and ask other landlords for referrals. Make a list of several potential companies to research further. Look for firms that specialize in managing the type of property you own, whether it’s single-family homes, condos, townhouses or large apartment buildings.
Interview Multiple Companies
Once you have a list, set up interviews with at least three different property management companies. This lets you compare their services, fees and professionalism side-by-side. Come prepared with questions about their experience, number of properties managed, staffing, services provided, client retention rate and fees. Also ask for references from current clients to contact later.
Look for Experienced Property Managers
Find out how long each company has been in business and the background of the principals. Look for established companies with a track record of success managing properties similar to yours. Also ask about the experience and qualifications of the specific property managers who would handle your property. Look for licensed managers with excellent communication skills.
Ask About Services Offered
A property management company can provide a range of services, so make sure you understand exactly what is included. Standard services usually include collecting rent, handling maintenance requests, managing vendors and contractors, paying property expenses from a manager’s account and enforcing rules and lease agreements. Many also provide services like finding tenants, negotiating leases, handling evictions and managing HOA issues.
Review Their Screening Process
One of the most important jobs of a property manager is screening potential tenants thoroughly. Make sure they have a stringent screening process that includes background checks, employment and income verification, rental history and credit checks. The goal is to find quality long-term tenants and avoid problem tenants that can destroy your profits.
Request References
Reputable property managers will be happy to provide references from current clients. Follow up by actually contacting the references to get their feedback on factors like responsiveness, integrity, enforcement of rules and leases, maintenance oversight and financial reporting accuracy. Speaking with references is one of the best ways to find a company that meets high standards.
Compare Fees
Property management fees can range from 5-15% of collected rents depending on services provided. There may also be initial set-up fees, inspection charges and fees for showing properties and handling maintenance. Make sure you understand the full fee structure and look for companies with reasonable rates. Also consider whether extra services like managing renovations or dealing with evictions cost extra.
Review Their Leasing Terms
Carefully read the property management agreement before signing. Look for clauses that allow you to terminate the relationship if you’re unhappy with the services provided. Make sure you agree with the length of the contract and the required notice period for cancellation. Also look for terms that protect your property from liability claims.
Choose a Local Company
Select a property management company located nearby your rental property. Local firms are more familiar with landlords tenant laws and will have established relationships with vendors and contractors in the area. This makes it easier to conduct inspections, oversee maintenance, handle emergencies and deal with tenants when needed.
Make Sure They Are Properly Licensed
Most states require property management companies to hold a real estate broker’s license. Check with your state regulatory agency to ensure the company you select has the proper licensing. This helps protect your interests and provides recourse in the event of any dispute. Avoid firms attempting to manage properties without the right credentials.
Look for Membership in a Professional Association
To demonstrate a commitment to ethics and professionalism, the property manager you select should belong to trade associations like the National Association of Residential Property Managers (NARPM) or the Institute of Real Estate Management (IREM). Members must comply with codes of ethics when dealing with clients.
Evaluate Their Communication Skills
During your interviews, pay close attention to their communication skills. Look for articulate individuals who listen well, answer your questions thoroughly and market their services effectively. Quality communication is crucial for providing good tenant support, marketing vacancies, enforcing rules and keeping you informed.
Trust Your Instincts
Your gut feeling about the integrity and professionalism of a company is very important. If something about a potential property manager just doesn’t seem right, move on and continue interviewing until you find a firm you feel 100% comfortable with. Being a good judge of character helps avoid regrets down the road.
Finding the right property management company to care for your rental home or apartment building is vital for protecting your investment. By thoroughly vetting several local real estate management firms, comparing their track record and fees, and checking references, you can make sure you select a company that provides maximum service for reasonable rates. With a great property manager helping you succeed, you can sit back and simply enjoy the many benefits of being a landlord.