When dealing with rentals, there are a few reasons to consider hiring a property manager as opposed to doing it yourself. If you are new to the title of landlord and are unsure about the inner workings of rental management, it may be a good idea to seek out assistance. When you have multiple units that you are trying to manage, it may be wise to get a helping hand. If you purchase properties that aren’t in your local area, it will make life easier to have someone local on the the ground to manage these properties for you. Whatever the reason for hiring a property manager, you want to ensure that you have the right people working for you. If you do not do your research and find a reliable property manager, it could cost you time, money, and possibly tenants.
Check local reviews
The best place to begin your search is by seeking out referrals. If you know other property owners in the area, ask them if they could refer a person or a company. You can also check with local real estate agents. They may have a working inner knowledge of the property management options in the area. Look on local real estate blog pages or community forums for suggestions as well. Try to check with as many sources as possible to ensure that you aren’t receiving a biased answer. If you hear the same input from multiple sources, there is a higher chance it may be true, as opposed to one person that had one bad experience.
Once you have found a couple different options, interview any that you may be considering. Just as with being able to trust a tenant with your property, you want to trust your property manager as well. This will be the person managing the application process, rent collection, maintenance requests or any tasks you wish to assign. You want to make sure that you have someone that is personable, interested in keeping tenants happy and most importantly, interested in keeping your properties profitable.
The interview process is similar to the tenant interviews and application process. You want to make sure that they are professional as well as pleasant. This will be the face of your rentals. You also need to make sure they are familiar with the area. Ask if they are currently managing any other local properties. If they do, you can ask if to see the locations in order to get an idea of their upkeep policies.
Fees and Contracts
One very important factor when deciding if a property manager will be a good fit for you is the contract and fees. During the interview process, ask if the contract is the same for all clients or if there is flexibility on an individual basis. Look at a sample contact if they have one on hand. Find out what options are available to you if issues arise. You want to be aware of the process if the arrangement doesn’t work out for any reason.
With any product or service, there will be some kind of fees involved. In order to determine whether it will be financially beneficial to have a property manager, you need to aware of any and all fees that will be charged for this service. The fees will vary depending on what services you expect the property manager to provide. Make a list of areas that you want to be handled by someone else and discuss these with each of the potential managers.
According to allpropertymanagement.com, there is typically a base fee for services that can range from 8% to 12% of monthly rent for the properties being managed. Some additional fees that could be charged from a property management company include but are not limited to vacant property or tenant occupied fees, maintenance fees, new tenant placement fees, eviction fees and/or late payment fees.
Unless you want the company to handle everything, there is a good chance that all of these fees may not apply. Some people and companies allow for a bit of negotiation when setting up fees also. Decide in advance what services you want and how much you reasonably want to pay for these services.
What to watch for
When choosing a property manager, you need to make sure that the terms of the contact and the fees collected will keep the property manager interested in keeping your rentals occupied and making money. If the terms of the contract have a large fee for placing a new tenant in addition to the base monthly fee, it may give them reason to continuously replace tenants in order to get the placement fee. This will cause you to lose money while the rental is vacant while waiting for a new tenant.
Also be aware of the way the contract is worded. The base monthly fee could be based on monthly rental value, monthly rent due or monthly rent collected. All of these mean something very different. Be vigilant when it comes to the contract and fees. Ask any question that you might have to ensure that you are clear on all of the terms.
Hiring a property manager is ultimately your decision. Do your research and due diligence in order to find the right fit for you. Even if you are only delegating one or two tasks to someone else, it is still a big responsibility that will partially determine the success of your rentals.