Best Questions to Ask When Evaluating Property Management Companies
Why Hire a Property Manager?
- Save the landlord time
- Save money with time invested on the rental property
- Access to a 24 repair call center
- Have a representative that is close to the property to evaluate
- Obtain better marketing of rental property with a property management company
- Receive warranties and guarantees offered by a property management company
- Use of a better screening procedure when evaluating tenants
Best Questions to Ask When Evaluating Property Management Companies :
What property management software is being used and WHY?
Why asking this question, it is wise to find out if the management software provides a cloud system for storing files. Leases, management contracts, inspection reports, etc. should have the ability to be stored in the “cloud”. You’ll also want to make sure there is a portal login for both tenant/resident and landlord. Reports should be provided in “real time” and not have to be “pushed” to the landlord. The management software should have the ability to receive repair requests and can track the repair process within the software.
Ideally, having an inspection software that lets the property management company perform inspection (complete with photos) is important to assisting in maintaining condition of property.
Obtaining a demonstration of the property management software is ideal!
How is Rent Collected and When is Rent Dispersed?
Tenant/Resident should be permitted to pay rent by cash, check, credit card, or epay via the property management software web portal. If EPay is permitted, having this option at no cost to the tenant/resident is ideal. If credit card is permitted, what is the processing fee and who pays the processing fee? Then, if a cash deposit of rent is permitted, how is this documented to not show a misrepresentation of funds?
A landlord will also want to evaluate who pays fees for a check that goes NSF and if the tenant is penalized.
Furthermore, any processing fees for electronic funds transfer should not be charged to the landlord and a landlord should not have to wait longer than 3 business days to receive these rents.
How are Repair Requests Handled from Beginning to End?
All tenants should be provided a 24 hour repair hotline to request repairs and provide online repair requests as well. The repair hotline should speak both english and spanish (depending upon your local market). The operator, on the phone, should be able to evaluate whether the call is deemed an emergency or non-emergency.
Any repair request should be instantaeously emailed to the property management company for evaluation and confirmation of whether the call is an emergency or non-emergency.
With this in mind, ask the property manager what an emergency and non-emergency is defined as and if they have an in-house staff or contract out vendors to assist in the repair. Make sure these vendors are insured and obtain good reviews online.
Most importantly, most property management contracts spell out a preauthorized limit that the manager can spend for a repair request. Confirm what this amount is within the management agreement.
Finally, you will want to confirm how repair requests are documented and ask how the followup of repairs are handled for feedback from the tenant.
What is the Rental Property Inspection Procedure?
This includes how often a rental property is inspected and how move in/move out condition reports are handled. Confirmation of whether inspection reports are signed by landlord and tenant signature as well.
Most importantly, confirm which inspection software is being used and review what an inspection report looks like to the landlord. Photos should be included in each report.
Confirm if the landlord is charged for the inspection and how much this will cost. Then, obtain a list of what is specifically is being evaluated and how preventative maintainance items will be handled over the course of the inspection of the rental property.
How Much are the Property Management Services?
Learn if the fees are flat fee, percentage of monthly rent, or offered al la carte. Services should be spelled out, IN COMPLETION, in the property management agreement.
Guarantees or warranties can be provided and any landlord should review those in writing.
Learn about any cancellation fees, fee for city inspections, and learn who holds the security deposit on behalf of the tenant. If fortunate, you may be able to obtain a free trial of services.
Finally, learn what is NOT INCLUDED in the management fee in which the landlord can be charged.
How is the Landlord be kept in Communication?
Learn if reports are provided in real-time and by email. Ask about the best way to contact the property manager (email/text/phone). Always helps to learn about how the management team is structured and what level of authorization is required for a property manager to care for a repair. Meaning, some repairs may require landlord approval.
How is Leasing of the Property Handled?
Any vacancy should be distributed on a variety of websites and it always helps if local real estate brokerages will be showing the home.
Tenant screening should be performed, in-house, and provide a full detail credit report, criminal background check, and eviction background check.
You may wish to ask if the landlord is forced to make the FINAL decision regarding any applicant. The property management company should be drafting the lease and the landlord should review this lease prior to signing a management agreement.
Again, obtain confirmation on who holds the security deposit. If property manager holds this deposit, how is this deposit held and how can deposit get released.
Learn about the fees for renewing a lease, filling the vacancy, and how long is the listing term of the lease listing agreement.
Finally, learn the cancellation fee for withdrawing the listing.
How is Late Rent Handled?
In order to ask this question, you will need to learn when rent is due and when it is considered past due. Learn what the late fee is fee and who gets to keep the late fee.
Learn how Notices are handled and how they are distributed.
Understand the property manager’s role in eviction and who is responsible for payment of the eviction. Landlord may wish to learn who gets to select the attorney that will represent during the eviction.
What Reviews are Provided on the Property Management Company?
Ideally, the property management company should be a recognized and accredited organization. This means being a Better Business Bureau member, no license violations with the State regulatory body, and not having a variety of negative reviews from landlords and disgruntled tenants.
Landlords should also consider whether the property management company manages part time and sells full time. You don’t want to work with a company that is not fully invested in property management.
Is the Property Manager a Real Estate Investor?
Ideally, having a management company that practices what they preach is perfect. Learn how many properties the management company owns and see if you can obtain addresses you may be able to drive too and evaluate condition. You may also be able to earn enough trust to see if you can call tenants for a referral.