If you own a rental property, whether or not you hire a property manager could determine the success — or lack thereof — of your investment. Many people dream of owning a rental unit, finding tenants, and collecting passive income month after month and year after year.
Of course, that’s only possible if you find good tenants who pay their rent on time, take care of your property, and don’t cause you a lick of trouble. One reason to consider retaining the services of a property management firm is that these businesses specialize in assisting landlords. You might not know what you don’t know — and that could wind up costing you over time.
While it makes sense to hire a property manager, that doesn’t mean any property management company will do. You must find the right one.
Here are five questions to ask any prospective candidate to make an informed decision when seeking outside help.
1. How Many Properties Do You Currently Manage?
Asking this question can get you some insight about the property manager’s experience and capacity. If the service provider has too few customers, that might suggest their services aren’t in high demand. But if they have a ton of clients, you’ll have reason to question whether or not it has sufficient bandwidth to provide you with an appropriate level of care. You want to find a property management firm with the employee count to offer the support you pay for.
2. What Kinds of Properties Do You Specialize in?
You also need to find out about the types of properties they specialize in. Single-family homes, duplexes, multi-unit buildings, and townhouses are different types of real estate categories.
It’s important to find a service provider experienced at helping people who own properties similar to yours. Such a property manager will know exactly what needs to be done and how to go about it.
3. How Do You Screen Tenants?
If you’re going to get reliable rental income, you need good tenants. A property manager will leverage its expertise to find quality tenants to occupy your units. So, ask about its specific screening process. Property managers run credit checks, verify employment and income, conduct criminal background checks, and talk to previous landlords.
In addition to helping you find good tenants, a property manager will know how to do so legally. The screening process must be done in a way that doesn’t involve rejecting applicants on grounds for which no one can legally be denied. You need to be confident that the property manager you hire has a screening process that’s effective and legal.
4. How Do You Manage Maintenance and Repairs?
It’s also vital to find out how any property manager you’re considering handles property upkeep. You should find out if the property manager has in-house staff or uses third-party contractors, if you will be kept in the loop and asked for approval before repairs are done, if the vendors are insured and licensed, and how fast repair and maintenance requests are handled.
If tenants are experiencing emergencies, you want a service provider that can be on the scene quickly.
5. What Types of Fees Do You Charge for Your Services?
You’ll obviously want to know how much it’ll cost to hire a property management team. Get a detailed breakdown of the applicable fees. Most service providers charge a percentage of rental income.
You may also face leasing fees if the property manager finds and places tenants.
If you’re going to buy an investment property, hiring a property management firm is worth considering.Do your research, ask the right questions, and make the right decisions.
