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When considering hiring a property manager there are a lot of questions you could ask. We have put together a comprehensive list of the questions that will be important to you as an owner.
Not every question will apply to your rental home or investing style, but we think you will find we have covered a lot of the bases here.
1. Do you have experience with commercial and residential properties?
You want to be sure that your new property management company has experience with the kind of investment property you have.
2. What kind of reports do you provide that I can give to my CPA?
Your rental property is an investment. Having a seamless way to communicate with your CPA will make year-end reporting much easier.
3. What methods of screening do you use for a new potential renter?
Understanding the property managers’ process for screening will help ensure you are getting the best possible tenants.
4. What is your turn over rate for renters?
Are renters happy and renewing their lease or moving out at the end of the original term?
5. Do you know your cost of vacancy?
You should be aware of the cost associated with a vacancy. A good property manager will have data and be able to explain the costs.
6. What kinds of technology do you use to interface with tenants?
You may not be comfortable with your property manager using social media to connect with your renters. Knowing in advance how they handle communication will allow you to understand their manner of business.
7. Do you use any tracking software to keep track of data related to my rental property?
You may want a property manager to have specific software you are familiar with. Knowing what data you will be receiving is important before you hire a property manager.
8. Do you, or someone from your team, ever drive by properties to make sure everything looks okay?
If you do not live near your rental property it might be nice to know if someone is checking in occasionally, or regularly, to be sure everything looks as it should.
9. How would you rate your communication skills?
Communication style and ability will be critical when dealing with a company. You want to be on the same page when you start so you know you can communicate effectively while you are working together.
10. What is your preferred method of communication? (text, email, etc.)
Some property managers will prefer you use only one form of communication. They should also be able to let you know how long it would take to hear back from them. Making sure you are on the same page about how to communicate before you hire a new property management company will make your working relationship go smoother.
11. How long have they been in the area?
You want a property manager who understands the area your property is located in. Having a new company from New York might not get you the best results in Florida.
12. Do they participate in community events?
While it is not critical to everyday business you might want to know if your property manager is active in the area.
13. What is the timeline if a tenant calls in the middle of the night for an emergency?
Knowing your property managers’ process and the timeline for handling repairs will let you know what your tenants can expect.
14. Who are their preferred vendors for repairs?
Some companies have on-staff maintenance people. Others have negotiated a reduced rate with local vendors.
15. What are their service levels?
You do not want a one size fits all property manager. Having options for different levels of service will ensure you and your tenants are getting what you need from your working relationship.
16. How many rentals do you manage?
You may want a smaller company instead of a big one. It will be a personal preference based on what you are more comfortable with.
17. How big is your staff?
It is important to know what size company you are working with. Understanding how many people may be involved with the handling of your rental is important. You should also know the role of each person so you know who to communicate with and when.
18. What experience do you have managing rentals like mine?
You might want to find another company to work with if they have only managed commercial rentals in the past. Let someone else be their guinea pig.
19. Do you do a market analysis to make sure my rental rate is appropriate for the area?
For the best chance at filling your rental quickly and not leaving any money on the table.
20. How often do you do inspections on full properties?
There is peace of mind in knowing that your rental has been properly inspected. It could cost you thousands if a leak or maintenance is neglected.
21. Are you currently invested in the local real estate market?
Someone who has property and deals with their own renters will have a better understanding of the market.
22. What will it take to cancel my contract with you if I am unhappy?
Before you commit to a contract with a property manager you should know what the terms are and how hard it will be to get out of.
23. Do you charge me if my rental is sitting empty?
There may be gaps between tenants. You will want to know upfront if you will be charged the full management fee during that time.
24. What are the management fees?
Most property managers have multiple levels of service. There will be a difference between a full-service company and one who only handles new tenant placement.
25. Are there any miscellaneous fees I should know about?
Having a complete picture of all the possible fees you might encounter will help you know what to expect in every scenario.
26. If I decide to list my property for sale can you take care of that?
Not every property manager is also a real estate broker. If you are considering selling in the near future having someone who knows your property would be preferable to starting new with someone else.
27. If I sell my rental property is there a stipulation in your contract that I have to use your company to sell it?
Always check the fine print. It is not uncommon for there to be a clause in the contract that if you decide to sell that you use them.
28. Do you do direct deposit for owners?
How you are getting paid is important. If they do not do direct deposit you will want to know what the process is.
29. What is the timeline for rents to be deposited?
It will also be helpful to know when you are getting paid. There is typically a few days difference between when the rent gets paid by the tenant and that money gets to you.
30. How do they collect rents from tenants?
There are many ways that rent can get paid. You will want to know what the property management company policy is before you sign with them to be sure it is something you are comfortable with.
31. Is there a charge for inspections of the unit?
Whatever their inspection policy is you will need to know ahead of time if you will be charged a fee. It might be worth $100 for you to have a professional inspection of the rental property. If nothing else you don’t want to be surprised by the bill.
32. Do you have an eviction warranty?
Some property management companies will not just handle the eviction but cover some of the costs or reduce the fee to place the next tenant if they were the ones who screened the renters.
33. How are evictions handled?
You want to know what will happen if a renter does not pay the rent. They should have a clear policy in place.
34. How long will you wait to start the eviction process?
Different companies will have a different policy for how quickly they will initiate an eviction. Be sure they are following a policy you agree with.
35. What is your marketing process?
You want your rental filled efficiently. If Craigslist is their only source for finding you renters you might consider going with someone with a more dynamic strategy.
36. What is the average your properties stay vacant?
This one is important. If you are interviewing several companies to handle your rental property you can compare which ones have better statistics.
37. Do you have a set income requirement for renters?
Is the income requirement firm or a little flexible? If this is an important factor in who lives in your rental home it is best to know the policy before you hire a property manager.
38. What control do I have over the lease agreement?
You need to know if the lease agreement is fixed and unchangeable or if you can add things to it.
39. Do you mark up repairs?
Some companies add a surcharge to repairs. Others will negotiate a lower rate with preferred providers and pass the savings on to you. It’s best to know which one you are getting.
40. How often will I receive updates about my rental home?
Most companies have a policy for how and what information gets dispersed to the owners. If you will be wanting more than they typically provide then making arrangements early will save both parties some surprises.
41. How long have you been in the property management business?
You might be comfortable with a small start-up company. Knowing their history in the market will give you some idea of what to expect.
42. How has time changed your business model?
Having a company that can adjust to market conditions and changes in the industry will give you the security that they are not going to fold if something changes.
43. Do you like what you do?
This may not be the first question that comes to mind. I would rather do business with professionals who enjoy what they do. It seems to me that those are the people who will take the most time and pride in their business doing well.
44. How many people are in your organization?
There is nothing wrong with a one-person shop. Knowing the size of the company will help you understand what volume they can handle.
45. Will I get a dedicated manager, or will it be a group effort?
If the company has only one person for each role you want to be sure you are contacting the correct person when you need something.
46. Can you provide references?
If your potential property manager cannot or will not provide you several references of happy customers it is a huge red flag.
47. Do you manage any rentals in my neighborhood?
If at all possible working with someone who understands the neighborhood your rental is in will make for a smoother turn over of tenants.
48. How do you fill rentals quickly without sacrificing quality in the tenants?
This is a great question. You will learn a lot about how they handle rental turnover and their process for getting you the best renters.
49. Can you explain the Fair Housing laws to me?
You may or may not know much about Fair Housing laws. But your property manager better know them backward and forwards. This is a huge part of their business and you want to be sure you are working with someone knowledgeable.
50. What type of insurance do you carry?
Yep, property management companies need insurance coverage too.
51. Do you make recommendations about insurance limits or coverage?
You may not need this advice. If you are new to being a landlord it could be helpful to have someone knowledgeable point your in the best direction for your investment.
52. Can you refer to an insurance agent who understands rentals?
Some property managers will be comfortable referring you to a company they have experience with. They may even prefer you to use one company over another. They will have dealt with a variety of scenarios over time.
53. What is your average vacancy rate on the units you manage?
Having actual statistics to compare might help you make a decision about the right company for you to work with. Be wary of any company that will not readily share that information with you.
54. Are you licensed?
If your state requires a license to be a property manager you will want to be sure to check that they are in good standing before signing a contract with them.
55. Are you required to have any certifications?
Like the previous question, it is important to know what is required for a company to do business in your area and are they staying current.
56. Can I get a sample of the reports you will be sending me?
This question should be anticipated when a company is trying to earn your business. They should want to show you how good a job they will do taking care of you and your real estate investment.
57. Can I see the documents you use such as your standard lease agreement?
Again, you want a company to be completely transparent about how they will take care of your business. There should be nothing to hide about the lease associated with your rental.
58. Will you make recommendations about potential investment opportunities if they arise?
If you are looking to grow your investment portfolio you may want to seek out a property manager who is not only a licensed real estate agent but comfortable recommending properties to you as opportunities arise.
59. Does your lease require renters insurance?
If you want this to be required you either want to be sure it is in the standard lease or that you can add it.
60. What is your owner retention rate?
This is often an overlooked question. If others do not stay with a company for long it might be an indication that other owners may have not been completely satisfied with the service they received.
61. Where are most of your properties located?
You want to be sure you have someone who is familiar with the neighborhood your rental is in.
62. What local or national professional organizations do you belong to?
Keeping up on the industry best practices will be important in a long term relationship with a company.
63. How many managers do you have on staff?
There is a difference between a large staff and property managers. You want to be sure they have plenty of people who know the technical side of contracts.
64. Is there a fee for switching management companies?
Believe it or not, this is something that might be in the contract when working with a property management company. Asking before you sign could save you a headache later.
65. Will you charge me marketing fees when my rental is empty?
When calculating the cost of hiring a property manager most landlords assume the marketing costs are part of the fees. You do not want to be blindsided by an additional bill after your new tenants move in.
66. Do I get a say in the approval of a renter?
This one may not be important to you. Some landlords like to have final approval on a renter before the lease is signed.
67. Will the tenants have direct access to me?
You are hiring a property manager to take care of your property and be the contact person. If you would still like to establish a relationship with your tenants you will need to arrange that with the property manager you are working with.
68. Do they have a specific rental marketing strategy?
It’s good business to understand the process by which your investment will be handled, which includes how it will be marketed to potential renters.
69. Do you use social media for business?
You may or may not be comfortable with the use of social media. Either way, you should know in advance.
70. What percentage of the security deposit is typically refunded?
This will give you an idea of how reliable the tenants they place are.
71. What is the average occupancy length?
If they are turning most of their listings over after the initial lease term they may not have the happiest renters. You will always have some that only stay the first lease term, but the fewer turnovers you have the less chance of a vacancy you will have.
72. Do you keep a maintenance reserve?
With a reserve in place, you will not have have to be contacted for every little repair. Having a set limit and professionals using their best judgment is one of the reasons you hired a property manager.
73. Do you have a move in/move out checklist?
If you manage your own property for any length of time you might already have a checklist. Comparing what you think is important to note against the company standard will help you see if you both have the same priorities.
74. What is your communication response time for owners and renters?
If you expect an immediate response to an email and the company policy is to respond in 24 hours you will want to know what to expect from the beginning.
75. What demographic is your average tenant?
This may or may not give you some insight into how and who they are marketing to.
76. What forms of payment are accepted by the tenants?
You may not care how your tenants pay, just as long as they pay on time. It is at least something to consider when interviewing potential property management companies.
77. What is the average make ready cost to me to turn over a rental?
You should have money set aside for maintenance. Knowing the average for paint, carpet cleaning and repairs will help you be sure you have the appropriate funds ready when a tenant moves out.
78. How wide a geographic area does your company cover?
Does your property manager cover a town or the entire state? This will be a personal choice for what you prefer.
79. Do you work with out of state owners?
Some companies would rather work with local owners. It simplifies getting signatures and possibly communication.
80. Is your company privately owned or a franchise?
There are advantages to both. This will depend on how you feel about working with an independent business or if you prefer the power of a larger franchise.
81. Do you work with HOA’s?
If your rental home is within an HOA it might be helpful to have a property manager who has worked with them previously. Some may not work with you if an HOA is a factor.
82. Do you have resources to help educate me to be a better owner?
Blogs like this one, resource materials on real estate investment or regular emails might appeal to you as an owner.
83. What is your long term plan for your company?
If you want to grow your portfolio you might want to be with a company who is also planning for growth too.
84. How many evictions to you process a year?
These are inevitable. Any decent company who properly screens tenants shouldn’t have many in a year depending on the volume of business they are doing.
85. What kind of property management software do you use?
If you have worked with a large property management company they may have used software that you are comfortable with. If that is a priority then making sure the companies system is something you can work with may be important to you.
86. Do you offer project management if there are extensive repairs needed between renters?
We all hope you never have major damage to your rental, but it is better to be prepared and know if the management company can help you navigate the repair process.
87. Can you recommend some zip codes that would be good for buying rental properties?
If you are interested in growing your portfolio having an expert show you the best markets is a good place to start.
You could ask a million questions, the bigger point is that you are comfortable with the property manager you work with. If you want to get a complete picture of what using a great property manager looks like then call the pros at Nest Finders.
9889 Gate Parkway North, Suite 402
Jacksonville, FL 32246