Owning and managing a rental property is undeniably a lot of work. You have to maintain the property, collect rent from tenants, and build a relationship your renters – all while managing in-house work like expenses, paying taxes, and keeping secure records. Not to mention, there’s a pile of additional work if you have a vacancy. While tons of daring landlords manage not one, but multiple properties on top of their full-time jobs, for some, this added work-load can get to be too stressful. If that’s you, there’s a solution: hiring a property manager.
Before you start searching for a property management firm, there are four things you need to keep in mind:
- Their Reputation and Experience
You want to find someone you, and your tenants, will trust. If you’re handing the management reigns over, you want to find a firm that has a good reputation and a good amount of experience. Find out how many properties they manage and how long the firm has been established. Ask them if they’re involved in the rental industry – like if they’re a member of the National Association of Residential Property Managers (NARPM®). Ask to meet who would be managing your properties specifically. Talk to other rental property owners to see who they use, and what they’ve heard about the companies you’re considering.
Quick Tip: Before signing a contract, bring up their business license and check to see if they’ve ever been suspended. You can instantly pull a business’ credit report with Experian.
- Tenant Retention and Turnover Rate
As you already know, vacancies are expensive, and if you’re investing money into a property manager then you’ll want to know if they have a good tenant retention rate. These numbers are crucial. While some tenant turnover is unavoidable (a rise in rent, bad tenants, etc.) you should expect a higher retention rate. After all, they’re professionals. They should be using the best tenant screening to select the right tenants for your properties.
- Management Policies and Procedures
Besides the occasional vacancy, maintaining and managing your property will be the property manager’s primary job. Ask them what their leasing and eviction procedures are. Find out what services they use to handle property maintenance. Make sure they’re using a robust property management software. Ultimately, you want to cross-check that their management procedures and policies are similar to yours, are up-to-date legally, and efficient.
Quick Tip: Cyber security is vital! Don’t forget to ask each firm how they protect yours, your tenant’s, and your rental applicants’ private information.
Finally, it’s time to ask about the dreaded property management fees. When evaluating the cost of a property management firm, you need to weigh the investment against the reward. Does the quality of the service justify the cost? Take a look at your budget and find a solution that fits your needs. Even if a firm has a big reputation and tons of management tools, if those tools don’t work for your property, it might not be worth the cost. On the flip side, a cheap solution might not have the tools you need or cover all the management aspects. Before you sign on, you should also look into their payment policy.
While you might be in a hurry to fill the position, don’t compromise your policies in order to fill the spot. It’s important that you hire a property manager that not only you trust, but that your residents will trust. If you’re interested in continuing to handle the maintenance and management aspects of the property yourself, but don’t want the added work of marketing a vacancy, showing the property, and vetting rental applicants, consider looking into hiring a real estate agent that specializes in rentals instead.
Are you considering getting a property manager?