9 Questions to Ask When Hiring a Property Manager
If you’re looking to hire a property manager, you may be wondering what questions to ask when hiring them. I have been a property manager for over 15 years, helping hundreds of other people manage their properties. I always suggest hiring a property manager but that doesn’t mean you need to.
Many times, if you have only one or two properties, you might be able to manage them yourself. However, there reaches a time when you either own too many or frankly, you might just not want to deal with the headaches of it. You want to enjoy the fruits of owning investment properties such as taking vacations and never have to worry about emergencies.
Here are the top nine questions to ask when hiring a property manager, which we categorized under the five major aspects of any real estate business.
On Management
1) How long have they been in business?
It’s important because if you have someone who is just doing it as a hobby or just started the business, they might not have any experience you need. They might offer the same price as other property managers who have been in the business longer.
2) What do they charge?
Is it a flat fee? Is it a percentage? Because if it is a percentage, their rate will go up as your rents go up, and if it’s a flat fee, it will stay the exact same, which they may or may not have a reason to increase your rent. Every good property manager should still increase your rent no matter what.
On Finances
3) How do they handle the financials?
Do they help you go through a budget versus actuals? Can they help you try to figure out what expenses you should be paying for and then help you analyze those every single year to determine if you were under or over that so you can proactively solve issues and problems?
On Proactiveness and Maintenance
4) What are they doing when it comes to solving problems?
How are they responding to them? How can they show you that they are being accountable or do they track their emails or they tracked their phone calls? Even when it comes to late-night maintenance, is it just an answering service? For example, in my property management company, we have emails and texts that we can show every step along the way of any emergency call.
5) How do they prevent problems?
We put emphasis on not having to solve problems but avoiding them in the first place. We are very proactive. In addition to doing things like newsletters and typical communication all throughout, we always set a time during the year to sit down and go through each person’s property.
On Communication
6) How do they contact you?
In case of emergencies or updates, how will you be notified? Will it be by email, phone, text message, or all of the above? Communication is a really important thing when it comes to any type of relationship. You want to make sure that you are very clear on how you expect to be communicated, and when.
On Rent Collection and Evictions
7) How do they collect the rent and when do they pay you?
Can they collect the rent when there are tenants that don’t have bank accounts, such as certain minorities? That might be a situation that you run into in the future depending upon where you are at.
8) What is their process for non-collection?
Do they actually go through the eviction process? Or do they just kind of talk to people and kick them out down the road? They should have a system set in place to deal with uncollected rent and abide by state laws on evictions.
9) Do they have attorneys?
Do they have a legal team to review all their paperwork and make sure it’s super airtight, or do they just use a standard form lease that they put together, maybe add into them through the years of what they have experienced?
In conclusion
The saying goes, you get what you pay for, so don’t be penny wise and pound foolish when picking a property manager. Make sure that they have a track record, and that they have experience dealing with the type of property that you have. More importantly, make sure to have a good working relationship with them.
If you don’t feel good about them, that is going to be something that you should be concerned about. At the end of the day, they are responsible for the most important and valuable asset that you have, and hiring a property manager is something that needs a high level of trust.
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