Their reasons for hiring a property management company are different for each property owner. In general, a property management company’s job is to keep your rental business trouble-free. That means they need to be knowledgeable about federal, state and local housing laws, how to best collect your rents, maintain your properties in proper working order, and ensure your tenants are keeping their end of the lease agreement.
Property management companies will also work to fill your vacancies, advertising the rental unit, interviewing and screening prospective tenants, and keeping up with all of the new tenant paperwork.
Property management companies are not free. And their fees and services can vary widely. Many landlords we know interview several companies to determine which is the best fit for their needs.
Here are some questions you might ask when interviewing property management firms:
- What does your standard service agreement include?
- What are your costs?
- How do you conduct repairs and maintenance? If the company has their own maintenance and landscaping staff, you can check out their quality before you sign anything. If they hire outsiders, inconsistencies could occur.
- What reporting can I expect? At minimum, a monthly report should be included. Some PM companies have online accounting systems that you can log into on your own to see what’s going on—just like online banking.
- What is your fee for filling a vacant unit? It’s usually either a flat fee or a percentage of the rent.
- How do you collect rent? You might prefer a company that does everything through electronic funds transfer—or you might need a service that can handle cash, money orders, or checks.
- When will I receive my money? Most PM companies will have your check or a direct deposit to you by the 10th of the month.
- Do you mark up subcontractors, materials, and supplies? You don’t want to be surprised by a bill that includes a $6.00 roll of paper towels—after you’ve already signed the contract.
- How do you handle emergencies? You might want an agreement that allows your PM company to spend up to $500 without needing your approval.
- How often will I hear from you? If you’re the type of landlord who only wants to hear from the property manager if the building is on fire, then you won’t want one who calls three times a week with questions and problems.
- What about evictions? Find out ahead of time if they offer eviction services and how much they charge.
Get a client list and call for references. Ask other landlords about unexpected expenses, unnecessary or unauthorized repair work performed, and mark ups on maintenance parts and services.
Meet the staff you’ll be dealing with to get a feel for communication styles and professional behavior.
Finally, check out the company’s insurance coverage and bonding status.
If you do hire a property management company, be absolutely sure before you sign any agreements–because you will probably be required to pay a few months of fees if you decide to cancel!