How do you choose your Property Manager?

Question

There are a number of forum postings out there on the subject of hiring Property Managers (PM) for rental properties; especially from out of state investors. While most postings are geared towards asking for referrals to sharing nightmare stories of dishonest or incompetent PMs, I have yet to find a discussion about the qualities one should look for, or what questions to ask a PM. How does one go about interviewing and choosing a good PM? Is it their fees? Number of years in the business? The number of properties managed? Clearly a mix of these, but there must be more to it. Would definitely be interested in hearing what you all think.

Shirley Johnson · Answer

As an investor for more than 40 years and someone who got a real estate license so I could work for the public, I would tell you to interview property management companies that are members of NARPM -National Association of Residential Property Management.  This organization is a leg of NAR-National Association of Realtors.

Members of NARPM and especially those that have worked to acquire additional credentials from NARPM generally have a higher level of education and the knowledge necessary to "Protect your asset and your liability exposure".  I always tell our landlords "Our job is far greater than just collecting your rent on time.  Our biggest job is to protect your asset and your liability exposure".

Each state and city has different landlord requirements as well as Federal requirements a landlord must adhere to.

Phil Earley · Answer

Customer service is what to look for.   We hire others to make our lives easier.  If the person we hire makes our lives tougher, who needs them.

In my opinion, the best way to find a company that best fits you is to walk into their office and interview the whole staff.   Go in unannounced and see how the staff handles it.   That reaction and their ability to handle surprises will be the same for the duration of your relationship.

*if the staff to property ratio is more than 1 staff member for every 60-75 properties, the chances of them being able to offer great customer service to you and your tenants are slim to none.

@Jonathan Towell ratio looks to be about 1 to 35 which is great.

Sam Sharata · Answer

@Catherine Barnes Many thanks for the insightful suggestions.

@David Faulkner I looked in the mirror and almost fainted! In all seriousness though, the ROI on some out of state opportunities is just too hard to ignore.

@Phil Earley I definitely like the idea of just showing up unannounced at their office.

To all who contributed, thank you for your wisdom and insights. I look forward to revisiting this discussion thread for more great commentary from the community!

David Faulkner · Answer

I would look in the mirror to find a good property manager. Then I would ask myself "Why on Earth am I looking out of state to invest in Real Estate when I am surrounded by great investment opportunities in my own backyard?" ... but that's me ...

Catherine German · Answer

Questions to ask when you meet with the PM:

How do they screen their tenants? Does this agent own rental properties ? How many years have they been leasing/managing? Tell me about your experience with difficult tenants. How many evictions have you been involved in? What is the demographic for my rental/community? How will serve me (the owner)? How often do you inspect occupied units? What type of accounting reports do you provide? What is your rental selection criteria ?

Go with your gut and if you feel the agent is not in it to serve you the owner and the tenants, don't sign with them. ask yourself do I trust this person ?  Will they manage my asset as I would ?

I have been a PM (and am currently a PM) and I have had to hire PMs and some are terrible. Some are great. So do your due dilligence.

Parker Fairfield · Answer

@Shirley JohnsonThe NARPM is one of those things that makes paying BP $ make senseThanks!

Parker Fairfield · Answer

@JR T.  what ratio would you say? @Phil Earley  great posts ... thanks  I love the idea of just popping in.

JR T. · Answer

1 office person per 35 I would wonder how they were making money.

Phil Earley · Answer

@Jonathan Towell  my ratios are based on office staff. Our internal maintenance people have more of an admin role to insure customer service.   The actual approved vendors are not employees of ours so I didn't include them.

Jonathan Towell · Answer

@Phil Earley Does that ratio of 1 to 60 include maintenance staff?

How do you choose your Property Manager?

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