If you are looking for exceptional service, you need to take a closer look at each property management company that you are considering to make sure they are the right fit for you. The people they have on staff are an important indicator of the level of service that they will be provided to you. Ideally, you want to be looking for honest and knowledgeable professionals to receive the best possible service.
Below is a list of issues to review and important questions to ask the property management firms you interview:
How Long Has the Company Been in Operation? Under This Name or a Different Name?
The general rule of thumb is to look for five years or more of experience. This needs to be weighed against other qualifying factors since there are subpar veterans and fantastic startups in certain markets. Be sure to avoid companies with name changes to avoid a bad past.
Have They Been Doing Property Management the Whole Time? Have They Been Managing the Type of Property You Own That Whole Time?
Property managers who focus on one property type or don’t provide realty services are proud of their market position. There are benefits to working with a company with one single focus and specialization. However, several competent property management companies provide excellent realty service and manage many property types. The main red flag to avoid is individuals that decide to become property managers overnight even if they are unqualified. Even though this applies to people from all backgrounds, it’s worth noting that when the real estate market slows down, a good number of realtors try to become property managers and don’t have the proper licensing or skills.
How Knowledgeable Are They?
If they appear to not have time to answer your questions in the interview process, don’t hire them. They either genuinely don’t have time for clients, or this is a front for their lack of experience. Try to lead the interview with hypotheticals to see if they offer correct answers or avoid your questions. If their answers are brief, then you will know they are not a serious company. If they provide detailed information, then they have laid out processes.
Are They Licensed to Practice Property Management?
It is essential for any company you hire to be licensed to practice property management. If the property management company that you choose is licensed, it means they are controlled by ethics and guidelines by their state’s governing authority. If they don’t have a license, they may be operating a state that doesn’t require one or under someone else’s license. Be sure to research your state’s laws and assess what requirements property management companies need to follow to avoid hiring a company doing things illegally. Lastly, check if they have any errors and omissions insurance policy.
What Certifications Does the Company and Its Employees Have? Do They Participate in Continuing Education?
It is best to find a company that keeps their employees informed and continues to train them. Professional certifications mean they have invested time in money required to be an expert in their field. Below is a list of trade organizations and the certificates they provide:
- National Association of Residential Property Managers (NARPM) – RMP, MPM, CRMC, CSS
- National Apartment Association (NAA) – CAM, CAMT, CAPS, CAS, NALP
- Institute of Real Estate Management (IREM) – CPM, ARM, AMO, ACOM
Does the Management Team Dress and Act Professionally?
A company needs to look professional when you are interviewing them. Observe how their staff is dressing and behaving. They need to be able to manage your tenants and look professional.
How Many Types of Properties Do They Manage? Do They Have a Specialty?
Generally speaking, it is best if they focus on specializing in one particular area.
Do They Manage Properties Locally, Regionally, or Nationally?
Depending on your investing goals, you may prefer a company with local expertise. That said, you may also want the stability of a major nationwide player in the industry. Consider what you are looking for and then decide which kind of property management company you are seeking.
Do They Manage Any Section 8 Properties?
These kinds of properties come with their unique issues and require particular knowledge to manage. If you own or are considering purchasing section 8 properties, be sure to look for a company experienced in this area.
How Long Is Their Average Client Relationship?
Longevity is an ideal sign.
Ask for the Addresses of Some of Their Properties So You Can Drive-By or Walk Through
It is wise to realize they will choose their best properties. Hunt down other properties they manage to see if they are well maintained and ask the residents for their opinion about the management company.
Where Is Their Office Located? How Far Is It From Your Rental Property?
A twenty-five-minute drive is the general rule of thumb. Try to not have their office further away than that from your property.
How Many People Do They Have on Staff?
Consider the benefits of the various sizes of property management companies and how they could potentially positively or negatively implicate your property.
Larger Company Benefits
- More Specialized Staff
- Usually, Have an In-House Maintenance Crew
- More Process-Driven
- Able to Negotiate Better Vendor Contracts
- Investment in Property Management Software
- Back-Up Staff for Emergencies
Smaller Company Benefits
- Directly Dealing with Staff
- Shorter Chain of Command with Quicker Responses
- Pricing Leverage
- Reputation Concern with Local Community
What Is Their Staff Turnover Rate?
The property management industry has a higher staff turnover rate. Be sure to bear this in mind when looking at statistics of companies you are considering working with. High turnover is a negative indication. You want to ideally build relationships with staff members over time. High staff turnover also indicates financial issues and instability. If you are worried about the company’s finances, run a credit check on them.
Who Is the Specific PM Who Will Handle the Company?
Be sure to ask to meet the exact manager that will be working with you. This way, you know who the company will be assigned to you and can make an informed decision. Consider the following when meeting them:
How Do They Show? Do They Dress and Act Professionally? Do They Seem Knowledgeable About Their Profession?
A nice outfit is not enough. Make sure they know their industry well.
How Long Have They Been a Property Manager and Not an Assistant?
Experience is essential. You will want to know their experience upfront.
How Long Have They Been with This Company? Where and How Long Were They in Their Prior Role?
Job hopping is not a good sign. The more time spent in a local market is better for the real estate rental market.
How Is Their Compensation Package Structured?
Try to figure out their pay structure to see what motivation they have to do a good job on the properties they manage.
Who Would You Work with If Your PM Is on Leave?
Be sure there is a qualified backup staff member that can handle issues that may come up at your properties if your PM is on leave.
What Are Their Office Hours and Do They Close on Weekends?
Property management is a job that is 24/7/365. Look for a property manager that will be working for you and your properties on weekends in addition to weekdays.
Who Handles the Weekend and Holiday Calls?
The individual has to be qualified to answer tenant issues even if they occur on evenings and weekends. Make sure the company does not tell your tenant to wait until Monday.
How Quickly Do They Respond to Tenant and Owner Calls?
If during the interview process, you have difficulty getting ahold of them, or if you get a quick reply, this is likely how things will be in the future. Would you want to work with a property management firm you could never get ahold of?
Examining the organization is important; however, it is also important to have an understanding of property management contracts and how they control the relationship you have with your property management company. In the next section of our guide, we will be looking at Responsibilities and Representations and their role in the relationship you will have with your property management company.