Not everyone is cut out to be a property manager, and no, it is not the same as being a real estate agent. Property management involves many other responsibilities besides rent collection. On your end, it is a huge decision to make as it determines how profitable your investments will be. Here are 10 questions to ask your property manager to assess their worth.
1. Are You Licensed To Be a Practicing Property Manager?
In most states, to be a property manager, you need to have a real estate license, at least. Make sure you ask the potential candidate to prove they are eligible to receive a commission off this job.
2. What Services Do You Provide?
This question is particularly important as it helps determine the tasks and responsibilities they can perform. A good property manager should be able to undertake major tasks like leasing, taxing, advertising, filling vacancies, rent negotiation, and so much more.
3. What Experience Does Your Company Have?
With this question, try and gauge their expertise. The longer a property manager has been in the field, the deeper their knowledge base should be.
Do take into account their niche and market base before you make a decision as all these affect the number of clients a business has.
4. Does the Company Invest in Real Estate?
A Property Management company should be actively participating in the market. It is their market presence that will increase their know-how of current trends.
Without knowledge, experience, or active participation, they cannot guide your investments. In fact, the chances of them mishandling existing properties are also high as they will be virtually unaware of market trends.
5. What are Service Fees?
This question in itself has layers. Ask for their basic fee structure for maintenance and then ask for packages. If they insist on charging per property, then they may be charging a higher fee.
Ask for increments and be clear on the increasing percentage. Where there are unclear boundaries, the company tends to charge higher as they see the property doing well.
Will they charge for a property with no tenants? If they are getting money without getting you a tenant, they may not be as motivated to fill in the vacancy.
6. Will the Company Handle Buying and Selling?
No matter how good the offer is, make sure you don’t sign over buying and selling rights to your property management company.
7. How Do You Screen Tenants?
The company must run credit and background checks on all potential candidates. Some even offer eviction warranties for a smaller fee, which is a good option. However, with a foolproof screening process, you shouldn’t need to pay for eviction.
8. Can I Look at Some Sample Documents?
Legal documentation needs to be well worded. The company should be able to present copies of previously filed reports that will give you an idea of whether they’re equipped to deal with legal matters or not.
9. How Long is the Maintenance Agreement?
Set the start and end date and be very clear on the terms of the contract. Make sure you add in a clause asking for a reminder before the end of term so that you can renew or cancel the contract in a timely manner.
10. Do You Have Any References?
A good management company should be able to prove their worth. Happy customers always leave feedback and are more than happy to provide references. If a company doesn’t have any references or positive feedback, then you need to reconsider your decision.