Questions to ask Property Management Companies

7 Replies

Hi everyone,


I am interviewing several property management companies and wanted to make sure I am covering everything.  Any suggestions on the specific questions I should be asking when interviewing them?

Thanks,

Kyle

1) Ask them to explain the city, state, and federal laws for dealing with tenants.

2) What are the steps for evicting a tenant?

3) What are the rules for collecting and storing security deposits?

4) Are you available to show units seven days a week? 

- Obviously you want maximum flexibility.

5) What type of extra fees do they charge? (advertising, evictions, tenant placement)

6) Do they provide an itemized list of all expenses for maintenance requirements?

7) Do they take professional photographs of the property? 

- We used a property management company to find, vet, and place tenants for one of our rentals and they advertised the fact they take "professional" photos...  It ended up just being a lady who works for the company and her ipad.. The pictures were not terrible but they were not anything special.

8) Who are the contractors that they will contact in the case of certain maintenance emergencies? 

- You should follow up and do research on each contractor yourself.

Good luck to you!

1. Are you NARPM credentialed? Not NARPM affiliated then keep moving, trust me.

2. How many rental properties do YOU PERSONALLY own and for how long? Does this person even know what it's like to be a landlord?

3. How many years of property management experience do you have? (No substitute for experience)

4. What is your lease renewal percentage?

5. How do you handle ________________ (evictions, late pays, maintenance requests, etc.)

6. How often do you inspect properties? (ask to see a sample inspection report)

7. How do you market my property? Look for professional photography, well written property descriptions, etc.)

There are like a million other things but that will get you started and notice I never mentioned price because honestly that should be the last question you should be asking. A good PM will save you far more $$ than they ever charge you and a bad PM will cost you more than you ever paid them.

Hello,

I’ve upvoted a couple of the replies above that referenced www.narpm.org as a resource. also, the Real Estate Guys Podcast episode from 9/24/17 gave some good advice and questions to ask while interviewing. You want to make sure they have great references. You also want to make sure they have an easy and efficient way of communicating with you. We have bi-weekly calls, and monthly financial report calls with our owners to make sure they know where every penny is going. Their staff must stay current on all fair housing and tenant law. These are a few tips to get you going but feel free to reach out to me. I’m in your area. 

Originally posted by @Kyle Mitchell :

Hi everyone,


I am interviewing several property management companies and wanted to make sure I am covering everything.  Any suggestions on the specific questions I should be asking when interviewing them?

Thanks,

Kyle

The very first thing you want to find out is how extensive the management company's experience is with exactly the kind of property you want them to manage.  And, when I say "exactly," I really mean it.  I have personally been burned by property management companies with insufficient experience managing the kind of asset I owned.  And please note that I said "insufficient experience."  That company had experience with this kind of asset, but it was not focused on that asset type.  I will never make that mistake again.

Second, you want to make sure that any property manager and the person the PM reports to also have *extensive* experience with your asset class.  It's not good enough that the company has experience.  Don't let them train a new manager on your dime.  It will kill you.

Make sure that you have the ability to require the company to replace the manger if he/she is not performing.

Find out what the chain of command is, and what the company does when a property is not performing up to standards.  Who is reviewing the financials before they get to you to make sure that the property is performing the way it should?  And what will happen when it is not?  Who is responsible, and whose feet will be held to the fire?

It's extremely important to understand how the company qualifies tenants.  What are the tenant qualification requirements?  How do they QC applications?  Find out what the bad debt rate is across their portfolio.  If they cannot get you an answer to the question, move on.  If it is higher than 3%, move on.  Find out how they manage bad debt and keep it to a minimum?  Are late paying tenants sent an eviction notice the day their rent is late, or does the company "work with" tenants (in other words, use your money to give people who don't pay a free place to stay for a while)?

@Kyle Mitchell I have a document that has a list of questions to ask.  Send me a PM and I'll share.  Hopefully it'll help.

in this order

What is your turnover ratio per year? 

Average stay? 

Total unit's under management? 

How many units did you turn over last year? 

Asking in this order verifys their answers. 

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