When you invest in something as significant as a rental property, you’re serious about your long-term financial plan—and now that plan depends on your success as a landlord. If you’re still learning about these new responsibilities, or if you just don’t have the necessary time to devote to it, you’ll need backup. You can delegate the day-to-day duties to a professional property manager, keeping your tenants happy and preventing problems. You’ll need to work with people you can trust completely, so it’s important to know what to look for in a property management company before you commit to one.
As property managers ourselves, we’ve learned how important it is for you to have all the information up-front, so we’ll give it to you straight. We’ve heard the horror stories about bad management companies from some clients before they switched to us. And we’ve learned from four decades of feedback, managing more than 7,000 properties.
Don’t be shy about asking questions—lots of them. These managers will be working for you, and you have a right to be clear on what that relationship entails. Plan to look into about three property management companies, and remember that they will be your investment partner. You can even print this out three times, so you can take notes during interviews and compare answers. Read below to learn what’s important as you screen property management companies.
The best way to find a company you can trust is to get the lowdown from someone you already trust. In lieu of that, online reviews are becoming more common, giving a broader picture of a company. Just make sure you read them fully—there are two sides to every story.
Property management companies that specialize in an area know all the rules and regulations and where the best resources are. They can even advise you on locations for future property investments, increasing your potential profits. Companies that invest in real estate themselves clearly have a passion for what they do.
You don’t have to rule out managers who are new to the role, but you may have to allow for a few bumps in the road as they build their skills.
Questions to ask: Are there different levels of service? If you have more than one property, can you get a discount? How long can you guarantee that monthly fee? Are there fees when the property is vacant?
You should feel comfortable talking to a manager during an interview, understand everything without having to read between the lines and ask if the company regularly checks in on tenants. Some companies offer online portals where the company, landlord, and tenant can all communicate. They might suggest a monthly survey for tenants to make sure no problems are on the horizon.
Get clarification on which services are included, and which the company does not offer, so you’re not caught off-guard when it falls to you. Ask when exactly they’re on call. Get it all in writing, detailing any exceptions. Some of the services they may offer:
- Marketing the property
- Finding potential tenants
- Screening tenants with in-depth background checks
- Assessing competitive rent amounts
- Preparing the lease, spelling out important details, and anticipating any complications
- Maintaining the property
- Arranging repairs (ideally, with vendors they have good relationships with, and at discount pricing)
- Scheduling regular inspections
- Collecting rent
- Organizing and archiving paperwork
- Taking care of accounting and providing monthly financial reports
- Forwarding funds recovered from late rents
- Coordinating tenant moves
- Handling evictions
Talent for Tenant Relations
If you didn’t know already, allow us to enlighten you: Tenants complain. Some tenants complain a lot. You selected the best candidates you could find, and you want them to be satisfied so you don’t have to go through the process again anytime soon. A property management company should have a proven strategy for keeping tenants happy and experience with handling complaints. Find out how they handle late rent or noisy tenants, and how many warnings they get before eviction proceedings are started.
For instance, as a long-established Orlando property management company, we’ve learned to expect an influx of complaints during hurricane season. We also allow extra time for tenants during the holidays and spring break weeks, not to mention national crises; as the country shut down for quarantine, we worked with landlords to update safety rules so the virus wouldn’t affect their property.
Property managers can perform background checks on tenants who concern you. They can also keep an eye out for evidence of property theft and weapons, breaking and entering, and any domestic abuse.
Questions To Ask
If you’re curious about anything, you have the right to ask about it. Here are some questions that might help your vetting process.
- Are there any current tenants of yours who I can talk to?
- How many rental units do you manage?
- What are your average vacancy rates?
- Can I cancel my management contract? Under what conditions? What steps are involved?
- What types of marketing do you use?
- Would you consider covering additional services if I need them?
- What kinds of insurance do you have?
- How do you vet your managers before you hire them? What licenses or specialized training do they have?
- What certifications does your company have?
You should check up on any licensing and certifications with your state’s real estate commission. The Better Business Bureau and Chamber of Commerce can help guide you, too, as well as your first impression of them. Once you find a management company you want to work with, agreeing to a one-year contract gives you enough time to observe how effective they are and a reasonable option for ending the relationship. There should also be up to a 60-day trial period, so you can end the arrangement if it’s not working.
Managing a property is as complicated as running your own home, with the added, unpredictable dynamic of a tenant. Being a landlord is fast-paced, and it requires time, organization, patience, and a knack for making money with real estate. You need a capable partner with all those qualities. If you’re in the Orlando, Florida, area and have decided on what you’re looking for in a property management company, R. Russell Properties would love to work with you. Contact us for more information.