Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
2y
Hi @Vinay M. - you should check out the "Property Manager Finder" under the "Build your Team" link in our Navigation bar. While I work here at BP, I also found a PM on there and signed with them last week.
One question I like to ask when I interview PMs is asking for their current occupancy rate, which I think is a key metric. It does not answer every question (are they under/overcharging, do they have egregious cancellation terms, do they have silly rights to sell your property, do they have two and half pages of ticky tack fees, etc.), but something has to go reasonably right for a PM to have 95% occupancy or greater on a several hundred unit portfolio, in my view. I have found in my limited experience that I can work through the other issues, if the PM is doing their job and keeping their units occupied most of the time at market rents.
Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.
Check out NARPM.com, BP’s Property Manager Finder, etc.
Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.
To avoid going through the same poor experience, keep reading.
Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
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