We are starting the journey on our first rental property and it will be out of state so we want to have a property management company while we ease into landlording. So, when looking for a PMC, what are the best questions to ask, and answers to look for?
@Leanne J. you make my heart jump for joy!!!
Far too many people hire a property manager based on advertised rates. They don't investigate and they certainly don't screen multiple options and hire the best one.
This is not all-inclusive but here's my basic pitch. If you have any questions, don't be afraid to ask me directly. Seriously, I don't believe in stupid questions and I love to help.
You can start by going to www.narpm.org and searching their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. In particular, look for companies or individuals with designations. The designations require adherence to strict standards and show they have excellent policies and procedures in place.
1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!
4. Review their lease agreement and addendums. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.
Here's my final note: if the property manager is unable to explain something to your complete satisfaction, it can be a red flag. All their processes should be in writing so you can review them and verify what you've been told. This is a negotiable items if you are in a smaller community with less competition.
Thank you @Nathan G. ! So many things I wouldn’t have thought of to even think of!
1. Are they NARPM credentialed? If not then you're dealing with an amateur, move on.
2. How many properties does the property manager / company owner personally own?
3. How many years of experience do they have? There is absolutely no substitute for experience in the PM business.
Thank you @Robert Gilstrap . Also great questions!
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