Renting property can be a lucrative business, but your results are only as good as the property manager you choose.
A quality property manager gets things done quickly and efficiently so your rental units stay in good condition, and your tenants are happy.
If you’ve been struggling with finding the right property manager for your needs, read on for this handy guide t help you find one you can trust.
Use the Referral System
Whether you’re hiring a contractor or choosing a new restaurant for dinner, the tried-and-true referral system is a great way to go. The same applies to your choice for a property manager.
Ask your real estate agent if they happen to have any local recommendations. Agents often work with property management companies, so they’ll likely have a few referrals you can try.
In addition to the pros, it can’t hurt to ask your family or friends. Whether they rent their property or own it just like you, they might know of a great management company to use.
Word of mouth is the best way to find someone who will work for your needs. You can also check with your state’s Real Estate Commission and the BBB.
These are great resources that will give you some better insight as to whether or not your prospective property manager will be a good fit. Check to make sure they are fully licensed and read their reviews.
After you’ve come up with a list of potential people, you can interview them individually. An interview is an excellent way to weed out the potential no’s.
Do Your Homework
Before you sign a contract with a property manager, there are several things you need to consider. In order to be successful, you need a manager or management company with a good track record.
Find out where they advertise available rentals, and take a look at what kind of signs they use to let people know the property is available. Are they using websites, newspapers, or other methods of advertisement?
Ask the potential property manager how many vacancies they have. You should also find out how long it usually takes to place a tenant.
if it takes a long time to get someone in your property, you could lose quite a bit of money. It’s important that the property manager you choose does their due diligence to get their properties rented quickly.
Make sure they also deal with your type of property. You don’t want to choose someone who only deals with apartment complexes if you’re renting out a single family home.
Take a closer look at their website if they have one, and pay close attention to the website’s features and design. Is it easy for prospective tenants to find available properties?
Are you able to use the website as an owner so you can monitor payments and statements? All of these things are an important piece of the puzzle to help ensure your success.
Read the Property Manager Contract
As with any business relationship, the contract is the foundation. When searching for an excellent property manager, ask if you can read a preliminary copy of the contract.
Read the terms and conditions carefully before you sign on the dotted line. This is your best line of defense if something goes wrong and you can nip issues in the bud before they start.
Find out who their main contact person is and what their information is so you can get in touch with them. Get a phone number and an email address. Two of each is even better so you’ll have a backup contact.
Ask what their prices are for their services and ensure that the monthly fee is clear. Do a price comparison among several property managers in your area to be sure you’re getting a fair deal.
If the fees look too high or much too low, this could be a serious red flag. It usually means their services are subpar or they have no experience.
Look at the number of days the property manager requires in advance to notify them of termination of services. If you’re unhappy with them, you should be able to end the relationship in around 30-60 days. This should give you enough time to find someone else.
The main job of a property manager is to handle repairs and maintenance. Find out how these are outsourced and if they charge you an extra fee on top of the regular cost in the contract.
Ask about retainers and find out how much they are if they require one for large or emergency repairs. They should also state that they will notify you if anything is outside of the normal scope or if it will cost more than the retainer.
Make Your Expectations Clear
In order for the relationship with your property manager to be a success, they need to know what your expectations are. Tell them when you expect to receive the rent from your tenants each month.
If you prefer direct deposit, find out if this is an option. All of these payment terms should be included in the contract so you’re protected.
Ask them who is responsible for keeping the tenant’s security deposit. In most cases, the management company holds it, but you might be the person responsible for keeping it.
If there’s a tenant late on rent, let the property manager know exactly how you plan to handle it. Check on their eviction proceedings to make sure it’s in compliance with local and state laws.
Tell the manager what you expect from the eviction process from the time the tenant leaves until a new one moves in. By setting these expectations in advance, you can prevent all kinds of problems later.
Understand Relationships with Tenants
As a property owner, you want your tenants to be happy and satisfied. That’s how you make money.
When you choose a property manager, emphasis on the tenant relationship is of the utmost importance. There are a lot of factors that go into this relationship, so you need to find out what the terms are in advance.
First, ask how much of a security deposit is usually required. Get a clear picture of what constitutes the tenant forfeiting their deposit at the end of the lease.
You can likely set your own rental rates, but ask how much they typically charge for a property that’s similar to yours. Ask about lease terms and whether they’re yearly, monthly, or month-to-month.
Find out how the property manager determines their monthly rental charges and if they use other comparables in the area. Do some digging to find out what other people are charging for properties that are similar to your rental.
Rent prices that are too high can cause your property to sit vacant for a long time. Alternatively, prices that are too low might bring in unsavory tenants so it’s good to find a happy medium.
Get a copy of a lease example from the property manager so you can take a closer look at the terms and conditions. Ask questions if you’re unsure or unhappy about anything you see.
The tenant’s responsibilities should be clearly stated in the lease. If they are responsible for lawn care or certain maintenance items, this should be spelled out for them so they know about it when they sign.
Your tenants should also know how late rent payments are handles. The process should be clear and easy to comprehend so there’s no misunderstanding.
The bottom line is, when your tenants are happy with the property manager, they’ll usually be happy to stay there and keep paying rent. You’ll also deal with a lot less turnover on your end with both tenant and manager.
Property Management Made Simple
In order to find the right property manager for your needs, you should always make it clear what you want and what you expect. Fostering a good relationship with them should help you turn your investment into a profitable venture.
Always look for good referrals and read through any contracts before you sign. Get a copy of the lease they use for tenants and make sure it lays the foundation for a good relationship.