Entrusting your rental space to a property manager is a major decision. However, this can be the help you need to get the best return on your investment. Before signing a contract, though, here are the most important questions to ask a property manager or a property management company.
In this article:
Questions to Ask Property Managers: Establishing Qualifications
In this first section, we’ll delve into important questions to ask a property manager when it comes to establishing their qualifications.
1. Do You Have a License for Property Management?
When hiring a property manager, it’s important to check if he or she is licensed. A license means that the property manager has the skills and qualifications to perform essential duties. In most states, property managers are required to have a real estate broker license. This is because they also perform real estate activities such as advertising, showing, and leasing properties, as well as collecting rent. Meanwhile, Washington, D.C., Montana, South Carolina, and South Dakota require a property management license.
Even if your state does not require a real estate or property management license, it’s better to choose someone who has the right credentials. Check if your property manager candidate has certifications from organizations like the National Property Management Association (NPMA) and National Association of Residential Property Managers (NARPM). With these qualifications, you can be confident about the skills and abilities of your property manager.
2. How Many Years of Property Management Experience Do You Have?
A license alone is not proof of one’s capabilities. As such, ask your property manager candidates about their years of experience. If they have been in the business for many years, they should have a proven track record. If not, this could be a potential red flag for your candidate.
3. How Many People Work for Your Property Management Company?
It’s important to include questions to ask property management company. If your property manager works for a large company, he or she will have more tools and resources to utilize. Since you will be entrusting your rental property, it’s also important to know the people who are working behind the scenes. Ask about the roles and infrastructure of your potential property management company.
4. How Many Rental Properties Do You Currently Manage?
Check if the size of the property management company is proportional to the number of properties currently being managed. If your property manager is handling a lot of properties, he or she may not have enough time to focus on your rental space. Thus, they may not be able to provide the quality of service that you expect and deserve. Choose a property manager that has enough time to handle even the minute details of your rental space.
5. Can You Provide References?
A reputable property management company will have no problem providing you with references. It should be easy for them to pull up records to showcase the quality work that they have done. If they refuse to provide references, it could indicate that previous clients were not happy with their property management services.
Essential Service Items for Your Property Management Questionnaire
When interviewing potential property managers, it helps to have a list of questions pertaining to their services and procedures. You can refer to this questionnaire to ensure that all the important bases are covered. Here are service-related questions to ask property manager candidates.
6. What Property Management Services Do You Offer?
Not all property management companies offer the same services. You need to find the one that can provide the services that your rental property needs. For instance, some property owners want someone to take complete control of their rental space while there are some who only want help with certain tasks such as collecting rent or managing finances.
From the start, you should know what services your property manager is capable of offering. This question is a good way to set expectations. That way, you won’t be wasting time and money in the future because you need additional services that the property manager cannot provide.
7. What Are Your Property Management Fees?
How much do property management companies charge to manage HOA or rental spaces? Some property managers charge a fixed fee while others charge a percentage of your monthly revenues. For the latter, the standard is about 7 to 12% of revenues. Be cautious when dealing with property managers who charge higher than that. You need to make sure the property management fee is reasonable based on the services provided.
Asking about property management fees outright also ensures that you’re not surprised by hidden charges later. Some property managers may have a low, fixed fee but will charge extra for evictions, viewings, court cases, maintenance, tenant finder fee, and other miscellaneous fees.
8. How Do You Calculate Rent?
A property manager should have a scientific or mathematical basis for setting rent. Though experience is important, they shouldn’t merely rely on instinct or a gut feeling. Choose a property manager who uses comparative market analysis when calculating rent for your property. They should be able to assess your rental property, real estate market trends, and other information to come up with a competitive and reasonable rental rate.
9. How Do You Collect Rent?
Late or missed rental payments can have significant consequences for your finances. Property owners rely on rental income to pay for operating expenses, management fees, taxes, insurance, and so on. As such, it’s important for your property manager to have an effective and reliable method for collecting rent each and every month.
You should also ask about which payment channels the property manager uses. Cash and check payments are not only outdated and inefficient, but they’re also more susceptible to potential theft or fraud. Online payments may be more reliable and it’s also more convenient for both you and your tenants.
10. What Is Your Screening Process for Tenants?
Owners will have to rely on their property manager to find the most qualified tenants for their rental space. A property manager should know how to choose tenants that will pay rent on time. This means conducting a comprehensive background check on potential tenants. Looking at their employment status, credit report, rental history, previous landlord references can tell you a lot about a tenant. Check if your property manager can do this. If not, will they hire someone to perform the background check, and who will pay for the background check?
11. What Is Your Marketing Strategy for My Rental Property?
Marketing is one of the most important duties of a property manager. Does your property manager candidate have a strong marketing plan that will allow them to find and advertise to potential tenants? Given the massive Internet boom, make sure to choose a property manager that can leverage digital marketing strategies as well. For example, social media marketing for real estate has proven to be very effective and lucrative.
12. Who Performs Maintenance and Repairs for My Rental Property?
How will the property manager handle maintenance and repairs? Will he do it himself or hire a handyman? If your property manager relies on contractors, you also need to know who these contractors are. This is to make sure that they are capable and charge reasonable prices.
You need to make sure that the property manager’s maintenance approach aligns with your own. Maybe you prefer a property manager who can perform in-house maintenance work because it will come out cheaper. Or, do you want the best possible maintenance for your rental property? Then, choose a property manager that has an extensive network of maintenance professionals.
13. How Often Do You Perform Property Walkthroughs?
Managers will have different schedules for property walkthroughs. Some may do it weekly or monthly while for others, it may be quarterly. Ideally, you want someone who can perform regular walkthroughs. That way, they’ll be able to catch and address minor issues before they lead to property damage, which is significantly more expensive to mend. It may be worthwhile to pay your property manager to conduct more walkthroughs because you can save more money in the long term.
14. Do You Keep Proper Documentation?
Choose a property manager that keeps proper documentation on all activities related to your rental space. For example, a Move In and Move Out Checklist (with before and after photos) can help you keep track of your rental property’s condition in between tenants. A property manager should also be able to keep important documents such as lease agreements, lease addendums, maintenance reports, inspection checklists and pull them up quickly when they are needed.
15. How Often Will You Update Me About My Rental Property?
Even though owners surrender property management duties to their managers, they still expect to receive updates about their rental property. Choose a property manager that can meet your expectations when it comes to property updates. If you need weekly updates but the property manager cannot provide them, it could lead to misunderstandings and conflicts down the line. Even if you don’t agree on a specific number, a property manager should make the effort to update you from time to time. If not, it could be a sign that things are not going well.
16. What Is Your Preferred Method of Communication?
You may prefer to communicate with your property manager by phone, but does your property manager prefer the same? He or she may prefer text or email given the time constraints. No matter what, it’s important to establish a method of communication so that there are no surprises or disappointments down the line.
Additional Questions to Ask Property Managers
In this final section, we have interview questions for condo property managers that are just as important to ask. Answers to these questions can provide property owners the assurance they need in case something bad happens.
17. Do You Have a Cancellation Policy?
Do not sign a property management contract that does not have a cancellation policy. Make sure that there are provisions for ending the contract in cases of negligence or failure to provide the agreed-upon services. Likewise, the property management company should have an option to end the contract for specified reasons. A cancellation policy will likely include termination fees and the amount of notice required for terminating the management contract.
18. Do You Have Property Management Insurance?
Look for a property management company that has adequate insurance coverage. This is to protect your rental property from potential issues or liabilities. Ideally, your property management company should have as much insurance coverage as possible but a $1 million general liability policy will be a good starting point. Make sure to ask about their insurance limits, as well as terms and conditions for their insurance policies.
19. Do You Provide Legal Assistance?
In case you are sued by disgruntled former tenants, can your property management company offer you legal assistance? Some property managers can advise you on tenancy laws while others may even represent you in court cases. It’s good to ask about a property management company’s legal history and their success rate.
20. Are You Ready to Hire a Property Manager?
Preparing for a property management interview questions and answers is one thing, but hiring a property manager is a whole other matter that you need to prepare for. Before entertaining property management candidates, think about the specific needs of your rental space. Come up with ideal answers that you want to hear from your interviewees. When you hear answers that match your expectations, you’ll know that you’ve found the right property manager for your rental property. Be prepared because the search process may take a long time, but it’s always better to be thorough!
Now that you know the important questions to ask property managers, it’s time to begin the search. If you don’t want to be overwhelmed by all the choices, feel free to browse the Rental Choice online directory to find the best property management company in your area.
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