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As a landlord, entrusting your properties to a property manager can be a big step. Although finding and working with the right property management company can be daunting, many investors find that doing so enables them to focus on building their businesses instead of chasing down rent, making minor repairs or screening tenants. So where do you start? Here are our top tips for hiring a property manager.
Searching online for property managers can give you a sense of what’s out there (try allpropertymanagement.com and managemyproperty.com), but the best way to start the process is to ask for referrals. Fellow investors, colleagues, brokers and realtors are all great resources along with your local real estate associations or landlord groups.
Before you decide on the perfect property manager, it’s important to go over the nitty-gritty details. How much will they charge for their services? How do they handle vacant properties? What are their maintenance policies? Do they have sufficient liability insurance? A thorough interview should get you the answers to your most important questions. Google "questions to ask a property manager" for some great interview topics. We suggest talking to at least three companies and narrowing down your choices from there.
It’s important to find out how your new property manager plans to acquire and screen tenants, as well as respond to problem tenants if the need arises. Be sure to ask about their customer service record with their current clients and their renters. If possible, see if you can speak with the tenants residing in the properties to see how quickly their concerns have been resolved, and ask for references from their current investor clients.
Many states require property managers to have a real estate license and some require them to carry a real estate broker’s license as well. Check the U.S. Department of Housing & Urban Development (HUD) for the laws in your state. Affiliations with property management associations and an accreditation by the Better Business Bureau are also good indicators of a top-notch company.
This is a big decision, one that affects all areas of your real estate business, so it’s definitely worthwhile to have your lawyer comb through a contract before it’s a go. And give yourself the option to end the relationship in case it does not work out. Adding a provision that ends the arrangement with a 30-day written notice will give you peace of mind.