How to vet property management companies

[Scott Mason]

Hello all, I just bought a 4 unit and am in the process of buying a few single family homes. I work full time and am strongly considering engaging with a property management company. I haven't even begun to connect with potential firms and wanted to see if there was some sort of checklist of questions I should ask them when I do. Any help would be great!

[Kim Meredith Hampton]

Scott,

Here is a blog I wrote last year, hope it helps;
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.
Hope these ideas have helped in conducting due diligence in hiring a property manager. Till next time...