Finding the right property management company can be a daunting task. It’s not a decision anyone should rush into without thoroughly assessing the company’s credibility first. The process of finding the right Property Manager is no different from screening a tenant, hiring an employee or selecting a daycare for your child. Research and interview a number of options, separate the good from the bad and request references.
In an effort to help you better protect your investment, listed below are 10 key questions to ask when interviewing a property management company.
- If you fail to collect rent for my property in a month, or if it is vacant, do I still pay you a management fee? Stay away from companies who collect a fee from you even when they were unsuccessful in collecting your rent. There are great companies out there that do not charge a fee when rent is not collected. They should only get paid if you get paid.
- What types of fees will your company retain from my tenant? There are a number of fees a company may be collecting from your tenant that do not get paid to you as the property owner. This is acceptable, as long as they are transparent and those fees are justifiable. Examples of these fees might be a late fee on rent collected late, NSF fee on dishonoured cheques or a lease break fee on early termination of the lease agreement.
- What is your policy on owner approval when it comes to maintenance concerns? Ultimately it’s your property and you should have a say on how your money is spent. That being said, there are many different policies out there when it comes to handling maintenance on your behalf. Make certain you’re comfortable with the policy of the company you choose. The last thing you want is to be stuck with a $1500 invoice and no warning. Even if it was a necessary expense, your bank account may not have been prepared for it.
- How many formal inspections will be conducted on my property per year? They should be able to provide you with a report after each inspection solidifying that the visit took place. Two inspections per year is a reasonable expectation. You don’t want the Property Manager annoying a good tenant by showing up at their door on a quarterly basis. Be wary of a company who claims to offer more than this, chances are you’re getting an aggressive sales pitch.
- How soon will rent be paid to my account after it’s collected? Some companies will deposit the positive net funds into your bank account a full month behind, where you wouldn’t receive June’s rent payment until sometime in July. Other companies will pay you June’s rent in the month of June. Tip: Have the equivalent of one month’s rent in your bank account at all times, as a cushion, in the event that rent does not get collected or there is an unexpected property expense. By doing so, you make certain your mortgage payment will be covered even when something out of your control occurs.
- What is your policy on large balance debt collection from a delinquent tenant after they’ve vacated? It’s important to know if the Property Manager will take the necessary steps of submitting the outstanding balance to a debt recovery agency on your behalf. If this service is not offered, it becomes your responsibility to collect the balance owed to you, where if you do nothing, you will never be reimbursed for the expenses incurred due to the negligent tenant.
- What methods will you use to market my property? An experienced company should have the resources to market your property in a number of different ways at a discounted cost to you. It pays to hire a company with a strong knowledge of online marketing. They should be able to offer free advertising of your property on their own website combined with a focused effort on social media websites like Facebook, Twitter and Instagram. The old fashioned lawn sign is still a great strategy as well as local newspapers if the property is located in a small town or rural area.
- What forms of communication can I expect from you? It can be very frustrating when your Property Manager isn’t returning your emails or phone calls. A good property management company not only returns calls and emails promptly, they reach out to you with updates when a lease is being renewed, informing you when a tenant is vacating and when maintenance concerns arise. In addition to this, an income statement should be administered to you each month specifying all revenues and expenses that occurred at your property.
- If a disrespectful tenant leaves my property in an unsatisfactory condition, how will you handle that situation on my behalf? They should be able to walk you through all of the necessary steps it will take in order for them to return your property to its original condition or better, in a timely matter, in order to ensure your property is re-rented as quickly as possible.
- When determining rent for my property, what are you basing it on? This question will help you establish their level of knowledge of market trends in the industry. Will they be basing the rent for your property on a couple of key influences, or do they consider a broader perspective with an understanding of the local fluctuating market, utilizing a quantity of factors and property comparison resources?
A great Property Manager should always represent the property owner’s best interests. Check the company’s better business bureau rating to see if there’s a history of unsatisfied customers. When requesting references, ask for both client and tenant references to better understand how processes are handled across the board. Be sure to examine their management contract and lease agreement carefully to determine where you may not be protected, and as always, follow your gut instinct.