Today we’re discussing a few important questions that you’ll want to ask when you’re interviewing a property management company.
First, find out how long the company has been doing property management. You want to know your property manager is familiar with your local rental market, including the laws, rental rates and marketing strategies that work best. Hiring a local and experienced company is a must. There are many real estate companies that manage properties as a side business.
You’ll need to ask how maintenance and repairs are handled. For most companies, there’s a huge profit center in maintenance, with as much as 50 percent of their revenue coming from marking up repair bills. Ask if they are willing to include in the contract that they won’t mark-up any of your repair bills. We think this is an unethical practice that should be avoided. It creates a conflict of interest.
Ask a potential property management company if they advertise on the MLS. Most discount firms do not advertise there, or they charge you extra when they do. The property sits on the market a lot longer and you alienate a lot of the potential renters out there. A cheap placement fee becomes very expensive when your property is vacant for months, or the tenant you place is low quality. At InvestPro, we post our properties on the MLS from day one.
Find out what type of leases the property manager uses. A weak lease will open you to tremendous liability and expenses down the road. We use one of the top property management law firms in the state to prepare all of our leases.
One of the biggest complaints we hear when we take over a property from another management company is that communication was poor. Before hiring a property manager, it’s a good idea to try to call them at various hours to see if someone will respond to you. We answer our phones with a live person and request are handled through our owner/tenant portal 24/7. That gives you the peace of mind that the company watching over one of your most valuable assets will always be accessible to you.
Ask if they require a tenant to pay first month’s rent, last month’s rent and a security deposit. Many companies try to attract tenants and reduce vacancy by charging only the first month’s rent and a security deposit. Again, this opens you up to more risk.
Finally, check the company’s online reviews. You want to do business with a company that has a good track record of service. You should be cautious of a company with a pattern of bad reviews or no reviews at all.
Before you hire anyone, get to know how a company operates. If you’d like to hear more about our services and what we can do for your company, contact us at InvestPro Properties.