What questions to ask when choosing a Property Management Company
Good morning all!
My husband and I are thinking about investing in our 1st multiplex (2-4 plex) rental. We will not be living in any of the units and the property will likely be 2-3 hours away (Sacramento/ Stockton, Ca.) from where we live (Hayward, Ca.), so we plan on hiring a Property Management company. When doing our research what would be some key things to look for, questions to ask, etc. Right now I've been Yelping companies but before I start making phone calls, I'd like to ask my friends & mentors at BP what are good questions to ask when choosing a Property Management company.
Thanks so much!
Janelle
Janelle Byrkit Hello, welcome
I am from Hayward too. A book I found useful was land lording on autopilot.
! Eviction rates
How many properties are they currently managing I personally don't like to be with a proeprty manager just starting out.
Rates shop three companies I never go with the cheapest you usually get what you pay for.
read the Management agreement to see if there are hidden cost and fees. or see if they are up front and have all fees on a one to two page sheet. which means they are straight forward and upfront.
see if they have an online portal for owners.
Ask around for owners that use them (don't ask the PM company, they'll just cherry pick their owners) Ask other PM companies in the area. We would never bad mouth respectable PM companies, but there are a few in our neck of the woods we try to steer owners away from. Goto a local REIA meeting and ask members who they use, and who to stay away from.
I'm in total agreement with @Stephen Haynes, you will definitely get what you pay for with PMs. The 1-3% difference in management fees means nothing when you have an unresponsive PM!
@Janelle Byrkit Here is a copy of a blog I wrote on hiring a professional property manager, hope this helps. All the best
Hiring a property manager is an important decision, and can be an asset for a property investor, but can also be a detriment if not chosen carefully and without some due diligence. Here are 10 tips on hiring a professional property manager:
1. Make sure that your property manager is a licensed Realtor or Broker, look them up on DBPR, the department of business & professional regulation.
2. Make sure their office is relatively close to your rental property. The farther it is, the harder it is to manage, show, find tenants, get vendors and inspect
3. Look at the experience of the Property Manager. They may not know the Fair Housing laws, take too long to fill the vacancy, have licensed vendors. How many units do they manage, or are they just doing this “on the side” for extra income.
4. What is their policy for dealing with evictions?
5. Are you willing to give up control? Most Professional Property Managers do everything; collect rent, schedule maintenance, pay taxes, pay mortgages & HOA dues, process security deposit claims, marketing , leasing , on call 24/7, handle landlord-tenant conflict. Its exhausting…..
6. Examine their management agreement, check to see if there is an out clause if you are dissatisfied, make sure it spells out the responsibilities of the owner and the property manager
7. What type of fees do they charge? Most companies will charge a management fee, leasing or placement fee and renewal fee. Ask if there are any any additional fees for maintenance, advertising, evictions, etc... and make sure they are outlined in the agreement. Do your homework, don't be fooled by low or flat management fees.
8. When and how will you receive your money each month? Will I receive a monthly statement?
9. Do they perform property inspections? What kind and how often?
10. How do they handle maintenance complaints or emergencies from tenants?
Property managers are great as a third party buffer or middle man, this is a business to us, it's not personal. Tenants understand they are dealing with a professional.
@Kim Meredith Hamptonhas a great answer.
In addition, you can ask if the are a member of NARPM- the national association or proeprty mgrs.
How long does it typically take for them to get a property rented? They should know this statistic .
Ask is they use the CAR lease, or if their lease has been reviewed by attorneys.
Thanks all. Each of your replies were extremely helpful & informative!
One of the big things I would stress is looking at their charges. Some Pm's will low ball services and then nickel and dime you for everything else I have seen people call me after getting a low rate from another PM and then getting charged 10% fees for maintenance, a fee to set up the account a marketing fee for advertising the property and so on and so forth. Also look for the Pms that take the time to sit down and explain their services. Look for PM companies that take the time to go and visit you at the property and talk about your needs. Instead of sending you a contract to sign with a low rate attached.