Picking the right company to manage your investment property can mean the difference between saving you thousands of dollars versus costing you thousands of dollars.
A good management company should be able to prevent a lot of problems before they happen. If they are organized, they should have form letters and procedures to deal with almost everything that might come up on any given day. If they are not organized, they will be running around all day putting out fires, so to speak. All of those fires will result in them being stressed, unreliable, and hard to get a hold of.
One indicator, as to how well their company runs, can be something as simple as how long it takes for them to get back to you when you leave a message or send them an email. You will quickly loose confidence in your management company if they are difficult to reach. Poor communication in the beginning is a sign of problems to come.
A property manager’s experience and knowledge of the industry can also play a big factor in how well they will manage your property. Inexperienced managers may not understand some of the dangers and risks that can come from allowing tenants to do certain things or how to handle certain maintenance issues. Even how a tenant’s seemingly innocent question is answered, can lead down a path to big problems. Experience and training can give the foresight needed to steer clear of several dangers.
Make sure you ask a lot of questions. Personally, I love it when a potential client asks me questions. The more questions you ask, the more confidence they should be able to instill in you. You should feel that you can trust them and rely on them.
Some helpful questions to ask a property manager would be:
How long have you been in business?
Why did you become a property manager?
What area do you cover? (You don’t want them spread too thin over too big of an area).
How often do you inspect the property? (2-3 times a year is usually sufficient)
How do you handle maintenance issues? How do you handle maintenance emergencies?
How do tenants report maintenance issues?
How do tenants pay their rent? How do I, as the property owner, get paid? (This should all be automated with online payments, deposits, and online portals for statements).
How do you handle late rent? At what point do you take steps for eviction? How do you handle an eviction? How do you handle a problem tenant? (These should be done swiftly. Speed and consistency is a major factor here. By the time the rent is late, rent will be due again in only a few short weeks so this needs to get resolved, or be on a clear path to being resolved, before the amount owed doubles.)
What efforts do you take to stay current on the laws and to keep your lease agreement current and updated?
What collection efforts do you use on a tenant that has moved out and owes money?
What legal resources do you have for a situation that is turning bad or has gone bad?
What do you do to fill vacancies? How long does it usually take to fill a vacancy? (A property manager should understand that a vacancy is a huge expense. They should be trying to fill it immediately after they’ve been informed someone is moving out. It’s not always possible, but their goal should be to have a new tenant lined up to move in as soon as the old tenant has moved out).
These are a lot of direct questions, but remember, these are things that a property manager deals with on a regular basis. They should be able to confidently answer these questions with no hesitation. You want a property manager that knows the problems that could come up and how to immediately deal with them.
Also, avoid part-time managers. You don’t want somebody that can only take care of your property if their other responsibilities do not get in the way. Avoid somebody that is managing it as a favor for you, like a neighbor, friend, or family member. Not only for all the reasons stated above, but often it’s illegal. In many states, to manage a property that is not your own, you are required to have a license.
After interviewing a property manager you should have a pretty good feel for how they run their company, and in turn, how they would run your property.
At Kasteel Property Management we thrive on keeping our systems and procedures simple easy and consistent for the benefit of our tenants and our property owners. We do more than just watch your rental property. We protect it, cultivate it, and help your investment grow.
Please leave a comment below and happy investing.
Kasteel Property Management