Management Companies: Key Questions and Information

[Cory Lader]

Hello BP! I am preparing to interview management companies in the Philadelphia region and I am wondering what key questions and information I should be seeking. What typically makes one company preferable to others? Are there any specific "red flags" I should be looking out for? Any general knowledge, stories, and/or feedback would be greatly appreciated!

[Kevin M.]

@Cory Lader I'll try and list some less-than-obvious things you should ask;

1) All Fees. Don't be fooled by a 6% management fee versus an 8% management fee. You need to inquire about ALL the fees a company charges as well as their rates for things like handyman work, cleaning, turnover, leasing fee, renewal fee etc. If the management company cannot articulate everything they will charge you with full transparency this can lead to a lot of friction down the road. Some companies try to bring clients in with a 6% fee then they ticky-tack charge for EVERYTHING.

2) Contract terms. Do they lock you in for a full year with a penalty to terminate? Do you have to use their contractors? Do they have a right to list your place for a commission if you decide to sell?

3) Startup costs. What are your onboarding costs and do you have a minimum account balance that has to be maintained?

4) Owner involvement. Do they require owners to handle security deposit? Do they require owners to sign leases? As an owner (especially if you're looking to scale), the more the PM can handle in your place, the better.

Hope this helps DM me if you have more questions. Good luck in your search.