A property manager is the person you, the owner, put in charge of making critical decisions about your property on your behalf. They can be one of your biggest assets, can ensure your monthly cash-flow, and can add significant value to your investment. Or, if you have a poor one, they can do the opposite and cost you exponentially more than what you initially bargained for. Therefore, picking the right one is critical.
Below are 5 things to look for when hiring a property manager:
RECOMMENDATIONS/WORD OF MOUTH: Aside from training your own property manager, since trust is key to the role, you should spend at least as much time screening a property manager as you would a prospective tenant. (The process can and should take several weeks). Cast a wide net to find the best options and pay close attention to reputation to ensure you find someone with YOUR best interests in mind. Seek out recommendations from investors or look to associations or meetings (Property Owners Associations for one) and inquire if they are part of an accredited national organization. Like most jobs, good word of mouth is critical and references are important.
PAST (AND PRESENT) EXPERIENCE: Dig deep into their past experience. How many properties or units have they managed in the past? How many employees do they utilize to manage those units. Understanding the answers to those questions will help you to better understand their capability. It is also important to know if they own rental properties themselves. If so, where and what type of units? On the one hand, they can better relate to you if they do, but on the other, (depending on their property), it might be a conflict of interest and they might seek to fill their vacancies at their own property before filling yours.
DO THEY USE THE RIGHT TOOLS AND ARE THEY KNOWLEDGABLE? Is the person you are selecting knowledgeable of your local market trends and appropriate rates for the area? Are they aware of new technology and different tools out there that can help them do their job efficiently? Have they every taken advantage of a collaborative operations software, like Common Areas, for example. Knowing their proficiency can help you to learn if they are truly interested in being as productive and efficient as possible. And if so, will you have access to the tools they might utilize and receive reports on a regular basis?
HOW DO THEY ADDRESS MAINTENANCE ISSUES? WHAT ARE THEIR FEES: Don’t just pick a property manager because they charge the lowest fees. Instead, focus on how they calculate their fees as a percentage of rent. And pay attention to the details because there may be hidden fees. Do they charge extra for maintenance issues resolved and how much? How do they address those maintenance issues? At what dollar value will the property manager need your permission? Will you be charged extras for quarterly inspections? Is seeking high-quality tenants part of the role or will you be charged extras for advertising? Considering the answers to all of those questions is critical, and shouldn’t simply be based on the standard fee they might initially provide.
DON’T FORGET ABOUT LIABILITY INSURANCE AND PROPERTY LICENSING: A property manager should have their own insurance in case of any lawsuits and in some states, it is mandatory. Find out if they have their own of if they need to be added to your insurance policy. And don’t forget about the property license since many states require a real estate broker’s license to do the job.
In the end, a property manager is managing the property on your behalf. There is a reasons for the old saying that “a good property manager is worth his or her weight in gold.”