As a rental property homeowner or investor, you want to protect your property. You handle everything necessary to ensure that your rentals are in top shape and that your vacancy rate is low. All this hard work, though, can make you wish for some help.
It could be that you are overwhelmed with the stress that comes with managing rental properties. Maybe it is because you would like to focus solely on investing. Or perhaps it is something else entirely.
Whatever brings you to the place of hiring a company for your rental properties, there are 11 questions to ask a property manager before you sign any agreements.
One of the most important questions to ask a property manager is to verify their license. Nearly all states in the U.S., including the state of Arizona, require property managers to have a license through the state in which they do business. Arizona law states that to operate as a property manager, a real estate broker’s license is required.
Before you go any further in asking questions – and surely before signing a contract – be sure to verify the property manager’s license and confirm that it is active and in good standing with the state.
If it is a Phoenix property manager you are looking for, then you want to find out how long they have been in the area – both in business and personally. You are looking for someone very familiar with the entire area. Not to mention that those with ties to the community usually have a solid network of support.
There is a lot to do when it comes to managing properties. Some property managers offer full service; others may charge an additional fee for certain services. Does the company perform thorough tenant screening? Property management marketing? Get to know what is included in their services and what all they can take off of your plate for you.
Every property manager is going to charge a fee for handling your property. Though keep in mind that this could vary based on the services you want them to do. Most companies will charge you a fee based on the amount of rent that is charged for the properties.
Be sure to discuss any additional fees that may be charged, whether for maintenance, legal issues, tenant screening, and more.
Trust your gut. If a property manager is telling you something that sounds too good, there is likely to be a catch down the road. Most property managers hide fees inside of their management agreements so always make sure to get a copy of the agreement, and read it, before signing. At RPM Evolve we believe in transparency – you won’t find any hidden fees in our contracts!
When seeking a property manager, you need someone who invests in technology to streamline their management processes – and this includes collecting rent. Online payment options are what you are looking for.
Other important questions to ask a property manager before hiring include discussing property maintenance. You want to make sure that your rental property is cared for. When a repair is needed, you need to feel confident that these repairs will be addressed promptly. After all, the longer a minor repair goes untouched, the more major the repair becomes – and the more costly for you.
Discuss how the repairs are addressed, if there are scheduled property inspections, who handles the repair payment, if you have a say in final decisions, and so on. The process should be effective and clear so that everyone is on the same page.
With technology the way it is today, you should be able to have access to info about your properties anytime, day or night. Ask to look at the reports and to see what information you will have access to within their system.
Keeping track of your properties this way will give you a good idea of how well you are or are not doing with your rentals.
The vacancy rate will give you an idea of how many properties are sitting vacant at any given time. You want this rate to be small. Too high of a vacancy rate will tell you that either they don’t have much success marketing the property or finding tenants. Or that they have a high turnover rate – which could signal that their tenant screening process may not be too effective.
Another important question concerning the vacancy rate is to find out whether the property manager collects management fees on vacant units. This is not a typical practice. Not receiving fees from you should push the team to work harder to fill the vacancy. Otherwise, they are receiving money, and you are not – and that isn’t making you a priority.
While it may be impressive to hear that a company has a roster of 1,500 properties they manage, it may mean you are just another client. Then again, it could mean they are doing something right. If personal service is what you are looking for, smaller local property management companies may be more beneficial.
You are looking for a property manager that is familiar with the types of rentals you own. For instance, you don’t want to take your multi-unit apartment building to a management team that is well-versed in handling single-family homes. Sometimes, their portfolio may include multiple types of properties which proves they are successful in both types of management. You want to ensure that your property manager has your best interest in mind, and that includes proven success with your type of property.
A property manager should have clients or a network of business associates that are willing to vouch for their work. If they don’t, that’s a sure sign to run.
As you begin your quest for a property management firm, look for the best. You want someone who is going to be transparent in their services and costs while providing you with open communication. And you want a company that has perfected its management process so that it is streamlined and efficient. These 11 questions to ask a property manager before hiring will give you bountiful insight into the type of company that they are.
Real Property Management Evolve is the top property management team in the Phoenix area that can give you all of these and more. With a customer-focused management process, your property is our priority.
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