Rental property management is a highly specialized job that can provide you with excellent results.
Here are some tips on finding the perfect property manager for you.
Being a landlord can be a great source of passive income. But it can also be a great source of stress.
There’s a lot that goes into managing a rental property: advertising, screening tenants, routine maintenance, rent collection, bookkeeping…and that’s if everything is going well! Throw in a few emergency repair requests or an eviction and the job can quickly become overwhelming.
It’s at that point that hiring a property manager starts to sound like a really good idea.
But how do you choose the right property manager out of so many options? (Hint: It’s not as easy as typing “property manager near me” into Google!)
Why the Right Property Manager Matters
If you’ve never hired a property manager before, you might be under the impression that—like drive-through car washes or florists—one is as good as another. And unfortunately, it can take several months before you realize that isn’t true.
To be fair, most property managers could do a fair job of collecting your tenants’ rent checks and changing the occasional light bulb, but these things are only a small portion of a property manager’s job. Property managers have plenty of other responsibilities that aren’t as simple and require a certain level of experience to master.
- Performing thorough background checks to find those “Dream Tenants”;
- Excellent customer service and tenant communication on emotionally charged issues;
- Bookkeeping and taxes;
- Vendor screening for routine and emergency maintenance.
Going with the first property manager to show up on Google is not a guarantee that you will receive quality service. To increase those odds, you need to do some due diligence.
How to Choose a Property Manager
The greater the population in your area, the fiercer the competition among landlords and property managers alike. You may have dozens, or even hundreds, of companies to choose from. How do you know where to begin?
Here are a few things to consider during your search for a rental property manager.
1. Real Estate Agent vs. Property Manager
The housing market is notoriously fickle, leading many real estate agents to think, “I should try my hand at property management.”
While this can turn into a lucrative career for some (including yours truly!), property management requires a full commitment. A real estate agent who is trying to keep both careers afloat probably won’t be able to provide you with the level of customer service and attention to detail that makes having a property manager so worthwhile.
Dedicated property managers have real-life experience managing rental properties and tenants. They’re up-to-date on the appropriate federal, state, and local laws. And, most importantly, you won’t get less of their attention when the housing market starts to change.
Even dedicated property managers don’t share the same qualifications, so it’s important to find one whose skill set matches your needs.
Just like lawyers, property managers have different specializations: some work primarily with commercial properties, others with residential. Some prefer bigger buildings and communities, others prefer a more intimate approach.
Whatever your needs are, property managers are not interchangeable.
Picking a huge commercial property manager because they have a major presence in your area (and therefore seem more trustworthy) will probably not be the right choice for your single-family rental home.
3. Property Management Agreement
Each property manager will do things a little differently—which is fine. Just make sure that you’re on the same page before you sign on the dotted line.
If your property manager works from a standard property management agreement, ask to review a sample to familiarize yourself with their policies and procedures.
Your property management agreement will set the stage for your entire experience, so don’t take this step lightly. Getting these details right will help you compare apples-to-apples so you pick a property manager you can work with.
Questions to Ask A Potential Property Manager
As you’re interviewing prospective candidates, here are a few additional questions to help you weed out the part-timers and find a real gem.
- How long have you been in property management?
A real estate agent who’s recently switched to property management will not provide you with the same experience as a company with 15+ years’ experience.
- How many properties do you manage?
A property manager with only a few properties under their belt is probably not in property management full-time.
- How much of your business is real estate sales?
This will help you weed out any real estate agents who are only dabbling in property management. It’s fine if they do some sales (maybe they can help you locate your next rental home!), but it shouldn’t be the majority of their business.
- Are you a member of the National Association of Residential Property Managers (NARPM)?
NARPM provides education, legal information, and more to help property managers better serve their employees. Membership in this organization shows that they take their property management duties seriously.
- What are your rates?
Rental properties should be a profitable investment, so make sure you can afford the property management rates.
- What is your vacancy rate?
Your rental home can’t provide you with passive income if there isn’t any income. If a property management companies has a high vacancy rate, there may be a good reason prospective tenants are staying away.
- What is your tenant turnover rate?
Keeping properties occupied at any cost could, well, cost you. Tenants that stay put are typically satisfied with their experience, which means you’ll be, too.
- Where do you advertise?
Your ad should be seen in multiple places to increase the odds that your Dream Tenant will see it.
- What do your ads look like?
Are they attractive? Informative? Accurate? The advertisement is your first chance for a first impression, so make sure you like what you see.
- What is included in your tenant background check?
At American Home Team Realty, we perform a 4-point background check: employment, rental history, character witnesses, and criminal & credit checks.
- How are maintenance requests handled?
Will you be notified of every call and expense or do you want to save your involvement for big ticket items? There’s no right or wrong answer here, but you want to make sure you arrive at an agreement that works for everyone.
Choosing a rental property manager should never be taken lightly.
The relationship you have with your property manager is important, as it will set the tone for your overall experience as a landlord. Don’t just choose any property management company!
Although our staff is made up of licensed REALTORs™, American Home Team Realty has been specializing in property management since 2003 and our main focus is on providing boutique management services to residential property owners looking for a source of truly passive income.
Our high standards, affordable rates, and excellent customer service will ease the burdens of being a landlord so you have more time for the things you love.
Call us today for more information.