Property managers can make or break your return on investment potential. You shouldn’t have just anyone looking over one of your greatest assets. Hiring a bad property manager can be damaging to your income potential. An average property manager will get the job done alright, but they might not have the ability to take your investments to the next level. That is why you need to be watchful of potentials that will make investment worth remembering.
There are 7 main areas to assess when searching for a great property manager.
1) Property Manager Background
Find out how long they have been in property management. Have they been in the industry long enough to understand the rental trends?
Make sure they are licensed if it is a requirement in your state. And check out their reviews from other clients.
2) Fee Structure and Management Contract
Figure out what their fee structure is like and how much you will really be paying them. Have a full understanding of what it will cost to hire them before signing a management contract.
Do they have a flat fee or is it percentage based?
Do they mark up their maintenance?
Also find out the terms of the management contract. How long is it? Are there any fees for breaking the contract by taking your rental property somewhere else? Some property managers will even charge their monthly fee while the property is vacant.
3) Legal History and Prevention
A great property manager usually works very closely with a real estate attorney or has one in house. A real estate attorney will understand how to draft up solid leases that help to protect you as a landlord.
You may also want to find out their history with evictions? Do they have experience with them? What sort of preventative measures are they taking? Meaning, how are they working to prevent problems from going to court?
4) Property Manager and Home Owner Communication
Aforementioned, one characteristic of a great property manager is communication. Ask the property manager how they communicate with landlords.
How often will they update you as a property is being leased?
When will you find out about maintenance problems at your rental property?
What is the best way to communicate with them: email, text, calls?
5) Leases and Tenant Screening
The lifeblood of rental property investing is finding great tenants. How is the property manager working to find the best tenants for your rental?
What is their screening process like?
What qualifies a tenant to live in a rental property?
How long are the lease terms?
A property manager should be running a background and credit check on potential tenants. These tenant screenings cost money. Find out who pays that fee; is it the landlord, the prospective tenants, or the property manager?
6) Property Marketing
What is the property manager doing to advertise your property? They should be working diligently to market your rental property to successfully find great tenants.
Where do they market the rental property?
Do they put a sign in the yard?
How long is their average vacancy?
7) Property Maintenance and Tenant Relations
How a property manager handles maintenance at a house is crucial.
How quickly do they handle maintenance issues when they arise?
How do tenants report maintenance problems?
Also, when it comes to maintenance, at what point do they notify you of a problem? Is there a certain dollar amount that they are allowed to freely operate under, or do they need your permission to do any kind of maintenance?
It is extremely beneficial when tenants stay longer in properties. The biggest expense in rental property investing is typically vacancy. If a tenant decides to live in the property longer it benefits you and the property manager. So what is the property manager doing to keep the tenants in your rental longer?
A property manager can make or break your return on investment. That is why it is crucial to find a great property manager to handle your rental. Take your time interviewing and researching great property managers in your area.
Make sure you feel confident that the property manager will oversee your property well.