Property Management

A quality property manager will relieve your rental worries; a poor one will exacerbate them. If you’re a landlord, or aspire to become one, you’ve likely pondered the possibility of hiring a property manager. But what services can you expect from a property manager, and how do you select a property manager that is up to snuff?

So you’ve decided to use the services of a property manager, but how do you go about finding a few candidates to interview?

If you have a relationship with a real estate professional, or another landlord, ask them for property manager leads.
Head to the web. A quick search will turn up various Property Management Directories. Usually, you can quickly perform a free search for property managers in your area.
While you’re on the web, be sure to scan the membership directory of The National Association of Residential Property Managers (NARPM).
Google for property management companies or property managers in your city. Spend a few moments reviewing their websites to get a feel for the type of properties they usually manage and if your property fits their profile.

Question everything:

Don’t be shy about questioning the potential property managers you interview. One question to cover right upfront is what steps are taken if you’re unsatisfied with their service and want to dissolve the relationship?Here are just a few other questions you’ll want to ask during an initial interview:

How long have they been in the business?
Are they licensed?
How many properties do managers usually manage at once?
Can you have the address of properties they manage, so you can drive by?
Can he or she provide references?

The Paperwork

Understanding the property management agreement is essential to selecting the right property manager for your needs. A well written agreement is a comprehensive document that clearly states the duties and responsibilities of the landlord and those of the property manager.

As you review the property management agreement, note any questions you may have and meet with the property manager for clarification. Some questions the document should answer include:

What specific ways will your property be marketed?
How are tenants screened?
How are lease renewals handled?
What is the process for damage inspection and return of the security deposit?
What type of repairs are the responsibility of the tenant, and what repairs are the responsibility of the landlord?
What is the “approval limit” on repairs?
How often is the property inspected, and how are property inspections conducted?
What steps are taken if the tenant does not pay his or her rent?
What’s the eviction process?
What date of the month can you expect to receive your monthly income/expense statement and rent?

Property Portfolio

It’s important that your property manager has experience managing property similar to yours. This will enable the property manager to effectively market the property, and deal with issues that often arise with properties such as yours.

If you have a modest duplex for rent in a stable working class neighborhood, but the property manager’s portfolio is packed with high-end single family homes that serve transient corporate types, this isn’t the right property manager for you.

Compare rental price, location and type of property in the manager’s portfolio against your property search for the best possible fit.

Once you’ve decided your property fits the property manager’s portfolio, drive by several of the properties he or she manages. Do they seem well-kept?

Understanding the Fees

When selecting a property manager, cost should not be the single determining factor. To truly compare competing property managers you must have a clear understanding of the various fees charged by each property manager you are considering.

Some common fees include:

Lease fee: Charged when your property is leased to a new tenant.
Lease renewal fee: Charged to as a fixed rate, or a percentage of the rent amount. This fee often covers an inspection of the property, and the paperwork associated with the renewal. A property manager may also consult with you about an increase in rent at this time.
Monthly management fee: This fee covers everyday management of the property, including such items as collecting the rent, property visits, etc. The fee is often a percentage of the rent, but can be a fixed amount. Fee collection usually begins the first month a tenant occupies the property.
Miscellaneous fees: Be sure to ask the property manager about any miscellaneous fees. Some miscellaneous fees may include advertising fees, project supervision fees, and property inspection fees.

Successfully Marketing Your Properties

One of the fundamental responsibilities of your property manager is to successfully market your property. Spend as much time as you need with the potential property manager to determine exactly how your property will be marketed.

A few questions to ask:

Will a “for rent” sign be put in the yard?
What publications might your property be listed in?
If you’re close to a military base, university or sizable corporations, how will the property manager target these populations?
Does the property manager make use of on line marketing venues, especially those such as Craigslist? Are images of your property included in the listing?
What happens if advertising isn’t successful, and the property remains vacant for several months?

There’s no doubt; selecting the right property manager for your property is critical to the success of your rental endeavor. While fees, agreements, and advertising strategies are important, don’t overlook personality and professionalism.

You should feel optimistic about developing a solid working relationship with the property manager you hire. If you aren’t getting a good vibe during the interview, move on to the next candidate.

Continue your search until you discover a property manager that understands your needs, has a history of successful management, is forthright about their fees, and demonstrates a genuine interest in the successful management of your property.