When you take on rental properties as part of your real estate investment strategy, you’ll have to decide whether or not to use a property manager. On the one hand, it can make your life a lot easier; but of course it also cuts into your profits. But if you’ve made the decision to hire one, you still must do your due diligence when it comes to choosing a property manager.
Making some extra effort when choosing a property manager is worthwhile. It provides peace of mind that things are being handled properly, that your best interests as a landlord are being represented, that you’re complying with local laws, and that your tenants are being well taken care of.
So, here are some tips for choosing a property manager you can trust.
How to Pick the Right Property Manager
- If you know other real estate investors who use property managers in the same area, ask for recommendations (and any warnings they may have, too).
- Research potential property managers and their agencies online. Check the Better Business Bureau and look for reviews from other landlords, tenants, and people who’ve used them for other real estate services. Also, skim through comments on the company’s social media pages.
- Look for a property management company that’s been around for a while, has strong local roots, and experience and expertise managing the type of property you own. Make sure they have experience specifically with residential or commercial properties, depending on which you’re considering them for.
- Be careful about hiring real estate agents who just do a little property management on the side. While many are great property managers, some may not have all the experience, expertise, and dedicated time you want them to have.
- Ask about their licensing, certifications, trade organization memberships, and continuing education.
- Request relevant references.
- Have your lawyer or another qualified professional read the property management contract. Make sure you understand the services provided, your responsibilities as the owner, all fees, how long the contract lasts, the termination clause, and other details.
- Also, have them review the property manager’s standard lease agreement.
- Confirm that they have E&O insurance and a general liability policy, as well as any other insurance that may be required under local law.
- Meet with the person who’d be handling your rental properties. Put yourself in a tenant’s shoes; is this someone you’d want to rent from?
- Evaluate the property management company’s website. Does it look modern and professional? Is it user friendly? Will you be able to create an owner’s account?
- Find out how they go about filling vacancies. Are they proactive, using multiple channels to attract tenants? How many vacancies do they currently have? What’s their average time of vacancy?
- Inquire about their rent-collection policies and procedures. Ask about how they handle maintenance and repairs, too.