Finding a Good PM - What to Ask?

Question

Hi BP!

I am 85% completion on my first property (2 doors) and have two more in the permit stages. I am looking to hire a PM company to handle the day to day on my behalf as I am terrified of the "professional tenants" that have plagued the Ontario, Canada rental market.

How do I screen for a good PM? What questions should I be asking? What qualifications/offerings should I be looking for?  What a reasonable percentage rate for their services?

Thanks for any input!

Sara

Account Closed · Answer

How much maintenance deposit do they require for each property ?

This figure should be added to the cost of the property when it comes to calculations, as it is gone for as long as you employ the PM , which presumably is until you sell the property

Craig Bellot · Answer

Here are some good questions to ask when interviewing your next property manager:

How long have you been a property manager?

How long have you been a manager in this area?

How many vacancies do you have right now?

Out of how many total units under management?

What is the average length of time it takes to fill a vacancy?

What is your late rent policy? What percentage of tenants do you have to evict?

How does the eviction process work here?

What are your management fees?

What do you charge for recruiting new tenants?

Do you charge for monitoring and maintaining vacant units?

What are my guarantees?

Do you also market properties as a broker?

If I decide to sell my property, do I have to list it with you?

Can I see some of the other properties you manage?(Of course you will probably not be able to see inside rented apartments or offices.But you should be able to see common areas and grounds.)

How do you market your apartments?

Do you recommend special incentives for tenants?

If I want additional marketing for specific vacant units, how would we arrange that?

How do you screen prospects?

How do your tenants contact you?

Let me know if you have any questions.  Thanks!  -Craig

Jonathan Bombaci · Answer

It’s a job interview and you’re starting a partnership with them. Bottom line you’re paying them to make you money. So interview them the same as you would any employee or potential business partner.

What’s the cost of your services?

How many employees do you have?

What type of employees do you have? What do they do?

What work do you subcontract out and who do you subcontract it out to (plumbing, electrical,etc)?

How many properties / units do they manage?for how many owners?

Do you own any units yourself?

What was your profit margin last year?

How many of your clients made money?

The ones that lost Money, why’d they lose it?

How do you handle a tenant that stops paying?

Tell me about a difficult eviction that you went through. What was the end result?

The list goes on and on. You want to know about there experience and so you have to ask questions. You’re hiring an employee that could make you thousands or cost you thousands. You have to determine which one it will be.

Sara Bradford · Answer

@Hai Loc I keep hearing so many horror stories and the LTB always finds in favour of the tenants.  There are so few protections in place for the LL.  I would far prefer to put the responsibility in the hands of a professional who won't fall for the sob stories. :)

Hai Loc · Answer

"professional tenants"  oh my

Geordy Rostad · Answer

@Sara Bradford

Percentage will probably vary depending on the size of the property between 5-10%. Bigger property will be a lower percentage.

That's not the whole story though. You need to know their entire fee schedule. Do they charge move in/move out fee for instance?

Ask for some references.