When choosing a potential Property Management company to help you out with your investment properties, there are a few things you should always consider?
Here are 12 questions you should probably ask any company before you make a decision.
- The first thing you will want to find out is how long the company has been in business. If the company is just starting out, they will most likely experience some hiccups. However, they may also be very motivated to get the job done correctly. Making sure the property management company has several years of experience is almost always a good box to have checked.
- Another thing you should find out is how many properties are they currently managing and what is their staff allocations to those properties. You always want to look for a balance of a professional organization that hires and staffs appropriately for the number of units they have under management. We believe having at least 500 units under management is a good sign the current management company you are interviewing has a good base.
- What type of software are they using? You want to make sure they have a software that you can log into anytime to check your statements. Many older companies that have not kept up with the technological advancements do not have a cloud based software system for their clients. We would advise going with a company that has this type of technology. Appfolio is one of the latest softwares that property management companies are switching over to.
- What types of warranties do they provide their clients when renting their property? For instance Bay Property Management Group provides a 6 month tenant warranty when they place a tenant in one of their units. This can help put the homeowner or investor at ease. If a property management company is going to warranty their tenant for 6 months or longer they are most likely going to be doing a great job screening the tenant before they move them in into the property.
- Are you allowed to use your own contractors? Some property management companies allow you to use your own contractors, while others will only allow you to pick from their pool of vendors. We do not believe there is a right or wrong way, however you will want to ask this question because if you are someone who has a lot of good relationships with vendors, you will want to know this before you enter into an agreement with a property management company.
- What is the monthly fee? Are there add-ons or extra charges for specific services? You will want to read the property management agreement very carefully because most property management companies will have a lot of EXTRA fees tacked into their contract. Extra fees like filing your 1099 forms at the end of the year, inspecting the property on a somewhat frequent basis, an extra few dollars for sending your money electronically each month, vendor markups, renewal charges on lease renewals, etc..
- Who is on the lease? Is the management company on the contract with the tenant or the owner? This is good to know in case issues arise and legal action is needed. You will want to make sure the lease is reviewed so you understand where you liability falls.
- How are after-hours emergency handled? Does the management company take care of all damage, repairs, and complaints and how do they get your approval for certain types of repairs?
- What is their policy for move-outs and how much notice is required? Are they able to show the property to the next tenant before the old tenant moves out? How far in advance do they start marketing for the upcoming vacancy?
- What is the renewal policy? Is it done automatically and are there extra charges for the owner or tenant if a new lease is requested?
- What is the eviction process? How long does it take, what additional fees are assessed, if any? Do they have experience with evictions? Have them walk you through the entire eviction process and make sure you are not going to be charged any additional fees.
- Does the management company do regular inspections on your property for damage and wear and tear? Are there charges added when the tenant is responsible? How do they assist with repairs? Is there a monetary limit they will pay for or does it all come from you as the property owner?
There may be other questions you can think of to ask when you are interviewing potential property management companies – go ahead and ask them, and it never hurts to know more about the company that will potentially partner with you in this endeavor.