Hiring a property management company is not an easy job that can be completed in a blink of an eye. It is a tough choice as you will be handing your entire investment in the hands of a management team that you are completely unfamiliar with.
It is very important to know about questions to ask property manager. This will allow you to find out about their pattern of your work and helps you get to the conclusion if they are capable of handling your property or not.
In this article, we will be taking a look at the questions to ask property manager along with why these questions are important and what conclusion the question provides to you, and the end of the interview.
How Long Have You Been Managing Rentals for Your Clients and How Do You Market the Property?
It is a smart move to choose a property management company that has been operating for a long time. It is very important to know how long they have been managing rentals as you will know if they’re capable enough of handling your property or not through their experience.
This can also stop you from putting your property at risk because if a property management company has never managed any rentals yet then how can you be sure that they will be able to manage your property effectively? Focus on your questions to ask property manager and think twice!!!
Advertising properties using many different canals can be done by a smart property manager. Stop a property management firm that only positions ads and hopes for the best on one platform.
What Are the Advantages I Have as an Owner and What Are the Changes I Can Make and Decide?
When you hire a property manager the first thing as a property manager the person will do is take a look at your property and note down each and every area that needs to get changed and re-optimized. The purpose here is to see what elements of your home may need to be changed or replaced.
This is a very important question to ask because some property management companies don’t allow landlords involvement while completing the rental procedure. Property managers will possibly inform you of major repairs and emergency repairs. Usually, minor fixes are not worth the extra time it takes to alert you. You shouldn’t hesitate to ask this question because enquiring about the changes you can make to the property and decide about it allows you to meet your requirements and will be beneficial if you do not want to make changes in your property.
How Long Is the Management Agreement for and What Are the Terms and Conditions?
Understanding the property management terms and conditions in an agreement is very important while renting out the property. You need to know what’s written in the agreement ad if you really agree to it or not. While signing the lease you can also put forward your points.
This also allows you to ask questions and know about the conditions that have not been written in the agreement. Knowing about how long the management agreement allows you to decide if you really want to invest that amount of time in the rental procedure or not.
Understand the terms of the relationship, including the duration of the contract, the extension of the agreement, and if any party is unhappy with the partnership, what is the procedure for severing the agreement?
What Is the Vacancy Rate of Your Property and How Stable Are They in the Market?
Knowing the vacancy rate of the property management company you’re going to hire is very important. A good property management company will be tracking its vacancy rate in the market. While asking this if they do not have an accurate answer then they aren’t keeping a good record of their vacancy rate. There are a lot of ways you can determine the vacancy rate of your property manager’s current market.
Generally, a property can be leased within 30 days of placing it on the market.
If they have several properties that extent 30 days, ask them why?
Longer vacancy rates may mean that the prices are too high for the rental. Because of the area it is in or the amenities added to the home, a home gets priced too high. An experienced property management firm should be able to take these variables into consideration and still price the home accurately.
Are You a Licensed Property Management Company?
One of the most important questions to ask a property manager is about their certifications. Knowing if the property management company has a proper license or not allows you to see if they’re trustworthy and if they will bother you in the future or not.
Hiring an unlicensed property manager can put you in trouble and blame you in the case of any illegal matters. You should be careful of the property management companies that do not have a clear certification and avoid such a team for your rental management.
All the laws that influence the property they control need to be understood by property managers. They need to consider health, safety, and environmental issues that directly affect tenants and real estate, including safety, health, insurance, etc. Hence, having a licensed property manager is a must.
How Many Properties Do You Currently Managing?
Typically, property managers have to tackle a lot of tasks. The number of rental properties operated by a business will assist you in assessing its size and expertise. Nevertheless, make sure that the organization is not overloaded based on the scale of their workers.
Will the company be able to devote enough time to your property if it operates multiple investment properties?
It can mean that they are inexperienced if a company manages very few rental units. They may have lost customers due to bad service, as well. Also, this helps you figure out what kinds of property they manage?
Which types of rental properties do you manage?
Ensure that you locate a management company inside the niche of your market. It should be able to handle the kinds of rental properties you own or consider purchasing comfortably. Not all management firms, for instance, have experience and expertise in the management of industrial or multi-family buildings. Some handle single-family rentals only.
What Are the Property Management Fees and Cost?
Some property managers can be very critical while choosing their company. A lot of time the property management costs can rely on the income of rental. Some property managers focus on your budget whereas some don’t.
Here you need to also ensure that the property management company has no hidden fees. Here are some of the questions you can ask while figuring out the cost and fees.
- What types of fees do you charge?
- How much their management fee?
Usually, it would be between 4 and 10 percent of the monthly gross income. Make sure that the fee is based on the received rent rather than the due rent. In the case of a vacancy, this would prevent you from having to pay the property manager. To know about how much do property managers charge you can click here.
Are there any additional fees?
Additional property management fees can include :
- Tenant placement
- Tenant placement fee
- Leasing fee
How Does Your Maintenance Program Work??
Just about every property management company is going to have a maintenance department. This just makes sense because obviously maintenance is required to keep your rental property on track.
But as an owner, you need to be really careful about maintenance costs. Some companies make most of their profit from maintenance because they charge so much for it. One of my main competitors charges $80 per hour for routine maintenance.
Here are the main items to pay attention to under this category:
What is your hourly rate for maintenance?
The average technician rate for central Oklahoma is around $50 per hour, so you should stay under that. As of now, our average hourly rate is $35 per hour.
Are your maintenance personnel contractors or on staff?
We use both depending upon the circumstances. If it is just regular maintenance, we send one of the staff technicians. If it’s something of a larger job, such as a total repaint, we’ll usually use a contractor who gives us a fixed bid. That tends to cost less for the owner overall.
Do you charge a markup on labor or materials?
Sometimes it makes sense to pay this, but we don’t charge it because we haven’t seen a good reason to charge for it.
In What Geographic Area Do You Rent Out Properties?
Mainly, this should be a pointed question to find out if they have experience leasing in the area in which your property is located. Just because they don’t, it’s not a deal killer. My company certainly doesn’t have rental properties on every street in the city. Just make sure they know enough about that market so you aren’t a Guinea pig for that company.
Describe Some of the Ways Your Company Is Able to Keep Maintenance Costs Down.
This is a must ask. If you don’t get clear answers, guess what? They don’t have any clear thinking around keeping costs down. I started out as a real estate investor, so our program is designed around keeping those costs down.
If you were to ask me that question, here is how I would respond:
- Our average hourly rate is 20% less than the average hourly rate for a technician in our area.
- We use reliable contractors to provide fixed-cost bids on larger projects, such as repaints, flooring charge outs, counter tops, etc.
- Our maintenance program is designed around avoiding big expenses by staying on top of routine maintenance for items like heat and air systems.
There are alot of services that a property manager should be providing. This includes their roles and responsibilities too.
I Need a Property Management Company That Is Responsive. Is Your Company Responsive, and If So, What Does That Look Like?
Every company will tell you they are responsive. But pay attention to what it means to them.
Here’s how I would answer that question:
We will respond to your request within one business day. That doesn’t mean every item will be resolved in that timeframe, but we will communicate to let you know how we are handling the issue.
Does Your Company Conduct Property Inspections? How Often, and How Does That Work?
It’s critical that someone from your property management company periodically lay their eyes on your property. You need to find out if the tenants are abusing the property. Or have pets that tear it up. Or there is some type of unchecked maintenance issue that is causing further damage.
Here are the types of inspections:
Prior to move-in: We have a checklist we use to make sure everything in the house we can check is in working order prior to the new tenant moving in.
Maintenance: During a service call, our maintenance techs will check a number of items that do not fall under the work order as long as they are at the property (and as long as we hadn’t just done such a thing). These include checking the air filters, smoke alarms and CO detectors, upkeep of the property, and status of the exterior (trees, siding, roof, etc.). It doesn’t take much extra time, but is critical. We can also do these annually if we hadn’t had any service calls at the property over the last year.
Walk through after move out: We do an evaluation for security deposit distribution and a make ready punch list once the tenant moves out.
How do you screen tenants?
If the property management company doesn’t do a careful screening of tenants, you will wind up with bad tenants. So question the property manager about their tenant screening process.
They should have tight guidelines. For example, here are our criteria:
- The tenant’s take home pay needs to be three times the rent. They must show verification of all income sources.
- Every adult living in the property must fill in an application. And, we’ll run credit on all adults.
- We won’t allow tenants with evictions within the last 3 years.
- We won’t allow tenants with felony convictions within the last 2 years.
- We will allow co-signers.
These can also be questions you could ask the property manager while questioning them about the tenant screening.
What Technology Do You Use to Do Your Job More Effectively?
In property management, really good software is a must. Used right, it can help a small staff accomplish great things. Here are the ones we use:
- An overall property management database that works well is essential. We are transitioning from Buildium to Appfolio simply to help us be more efficient and give our owners and tenants a better user interface.
- We use Tenant Turner as a scheduling and follow-up tool for leasing. It also helps build up a waiting list for every property we have coming available for lease.
Can You Send Me a Copy of Your Management Agreement and Your Lease??
The property management agreement will have all the details about the agreement you will enter. And, the lease will be the agreement you enter with your tenant. It also helps to see a copy of the monthly itemized statement.
What should I look for when interviewing a property management company?
Tenant Screening Skills
Their Vacancy Costs And Turnover Rates
Their technical skills, as well as their ability to communicate with others.
What do I need to know before signing a lease with a property manager?
Know what you’re getting for your money.
Make a note of the apartment’s state.
Inquire about the apartment’s pet rules.
Make sure you know how long your lease is.
Inquire about the possibility of subleasing.
Why is interviewing property managers important?
Interviewing a property manager is important to secure your property in the right hands.
What do you mean by asking for a reference while interviewing a property manager?
Other clients, business professionals, real estate agents, mortgage brokers, lawyers, contractors, or any of the other parties with whom the manager has formed a partnership may be among them
How do you know if the property manager is not the right one?
Poor communication skills
Hesitation to answer the questions
Not keeping the vacancy rate
Lack of proper service
What are the most important factors when deciding on a property management company?
Look at their customer reviews. Only hire a company that has 4 star or better, and at least 100 reviews. Also look at their rating with the Better Business Bureau. If they don’t have an A+ rating, why not?
What is the biggest thing to avoid when hiring a property management company?
Don’t hire a company that will not allow you to cancel service at any time without financial penalty. If they are confident in their ability to do a good job for you, they won’t be worried about losing you as a customer.
Should you ask for references when hiring a property management company?
You can, but customer reviews are more powerful because they show you a better track record of performance.