Choosing a property management company is an important decision for any real estate investor. The right company can make the whole rental process easy. Start out by asking these basic questions to find the right company for you and your rental.
Most likely, this is your first question when considering a company. Know exactly what the cost will be, including extra costs that will be incurred along the way.
Find out if the manager is properly licensed according to your local requirements. Some states require a license, either a specific property management license or a real estate license.
When calculating experience, property managers use a metric called “unit-years.” By this measurement, someone who manages 10 properties for 2 years has 20 unit-years of experience. You’ll want someone who has a significant amount of experience managing the type of property that you have.
You’ll want to know about how they handle routine repairs, emergency repairs, and cleaning in between tenants. Some companies may add charges for repairs, in addition to the cost of the repairs.
The less time your property is vacant, the less money you’ll lose. A savvy management company will know that online advertising is a valuable tool for reaching more potential applicants, and they’ll know which sites to post to. Ask them if they post to sites like Zillow, Trulia, and Hotpads. You’ll also want to know if there’s an additional fee for advertising.
You’ll want to make sure that the company you choose has a thorough, professional process for showing your rental and interviewing applicants. Some management companies do not accompany applicants to the property, but rather give them access to the property by providing them with a key. This is a safety concern and an in-person showing can provide both potential tenants and property managers valuable information.
Screening is a necessary step of the process, and valuable information can be obtained through rental applications and background reports. It’s good to know which screening background company will be used and whether or not they’ll follow up with references.
The “how” is the payment method. Direct deposits are beneficial because you can receive payments even when you’re out of town. It’s also important to know when you’ll receive payments because some companies will delay payments by as many as 45 days.
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