Finding a reliable and trustworthy property management company is one of the most important decisions a property owner can make. A good property manager is essential for maximizing returns on rental properties and providing quality service to tenants. Here are some tips on how to find and select the best home property management company for your needs:
Understand What Property Managers Do
Property managers handle all aspects of overseeing a rental property. Their core responsibilities include:
- Advertising vacancies and screening prospective tenants
- Conducting background checks and credit reports on applicants
- Collecting rent and security deposits
- Responding to maintenance requests and coordinating repairs
- Enforcing lease terms and addressing issues with tenants
- Paying property-related bills and pursuing evictions if necessary
- Providing owners with periodic income and expense reports
A property manager acts as the owner's agent and ensures the investment property is running smoothly. Their services provide owners with hands-off investment management.
Determine Your Property Management Needs
Consider the number and types of rental properties you own. Factors like:
- Number of units (single-family homes vs multi-family complexes)
- Location (all properties in one area or scattered geographically)
- Type of property (residential, commercial, vacation rentals)
All play a role in what you require from a property management company. Interview several companies and get quotes based on your specific rental portfolio. This determines if the company can effectively manage the scope of your properties.
Look for Experience and Specialization
Seek out property managers with expertise that aligns with your needs. If you mainly own commercial buildings, pick a company that specializes in overseeing office spaces, retail stores, etc. For residential rentals, find a manager experienced with single-family homes or apartments/condos.
Ask about the company's experience:
- Years in business and number of properties under management
- Types of properties they currently oversee
- Experience dealing with certain types of rentals (corporate rentals, low-income housing, etc)
Their portfolio of properties should closely resemble yours.
Verify Licensing and Credentials
Most states require property managers to hold a real estate license. Check that the company's key staff are properly licensed.
Look for individuals with credentials like:
- Certified Property Manager (CPM)
- Accredited Residential Manager (ARM)
- Accredited Commercial Manager (ACoM)
These professional designations indicate expertise and continuing education in property management.
Interview Multiple Candidates
Don't just go with the first property management company you find. Thoroughly research and interview at least 3-5 candidates before deciding. Compare factors like:
- Fees/contract terms
- Years in business
- Number of properties under management
- Types of services provided
- Customer service policies and responsiveness
- Screening/selection process for tenants
- Property inspection process
- Owner communication practices
- Maintenance staffing and coordination abilities
- Accounting services and online owner portals
- Insurance policies held
Meeting with multiple companies in person allows you to get a feel for their professionalism, company culture, and fit for your needs.
Ask for Client and Property Owner References
Reputable property managers will be happy to provide references from current clients and property owners they work with. Follow up with these references to gain insider knowledge about their experience partnering with the company.
Ask references about:
- Responsiveness to maintenance issues
- Owner communication and transparency
- Tenant screening effectiveness
- Success filling vacancies
- Rent collection rates
- Knowledge of local landlord-tenant laws
- Overall professionalism and working relationship
Speaking with owners with firsthand experience gives you the best sense of what to expect if you hire the company.
Review Their Fees and Accounting Services
Property managers charge monthly management fees as a percentage of collected rents, typically between 8-12%. Be sure you understand their full fee structure, including:
- Management fee percentage
- Leasing fees for placing new tenants
- Early lease termination fees
- Maintenance mark-ups and trip fees
- Accounting services fees
- Other administrative fees
Also ask about their accounting services and owner financial reporting. You want detailed monthly reports on:
- Rents collected
- Occupancy rates
- Maintenance issues
- Operating expenses
- Budget variances
Robust accounting services ensure optimum financial oversight.
Assess Their Tenant Screening Process
Ask property managers to outline their tenant vetting and selection system. Key factors they should check include:
- Credit history and credit scores
- Former rental history
- Employment/income verification
- Criminal background check
- Eviction history
- Landlord references
Their screening criteria should align with your standards for identifying responsible, trustworthy tenants. Also, ask about their system for monitoring tenants and lease enforcement.
Examine Their Maintenance Capabilities
Property maintenance is one of the most vital services a manager provides. Review their:
- In-house maintenance staff vs reliance on subcontractors
- Standard property inspection frequency
- Process for handling emergency repairs
- Owner approvals for repairs above a specified cost
- Ability to identify preventative maintenance needs
- Relationships with reliable, cost-effective contractors
Ask for a sample maintenance report they provide to owners. It should document repairs completed, costs, approvals obtained, etc.
Review Insurance Coverage
The property management company should carry adequate general liability insurance, landlord protection coverage, and bonding to cover employees who handle money.
Verify they have proper coverage by asking for certificates of insurance. See that policy limits adequately cover potential liability risks related to managing your properties.
Sign a Clear, Comprehensive Contract
Before hiring a property manager, finalize a written contract covering all aspects of their services and fees. It should include specifics like:
- Precisely defined manager responsibilities
- Owner obligations
- Fees for management, leasing, and maintenance
- Accounting services details
- Termination provision steps and timing
Review the property management contract carefully. Get legal guidance if you have concerns to ensure your interests are protected.
Trust Your Instincts
After thoroughly vetting candidates, pick the property management company you feel most comfortable with. Consider factors like direct experience managing similar properties and genuine interest in meeting your needs.
Go with the manager whose expertise inspires confidence they can handle day-to-day oversight. This frees you up to focus on higher-level investment strategy rather than daily property administration.
With careful research and comparison, you can find an ideal property manager suited to overseeing your real estate investments. Leverage their knowledge and experience to maximize rental property returns with minimal headaches.