What are some questions you’d ask a property management companies references to vet them out and see if they are a good fit? What questions would you ask interviewing the property management company. The duplex I’m closing on is currently being managed by a local property management company. I originally intended to manage the property myself because property managers really don’t have great reputations around here, but I am open to it and do have it figured in my number. What do you think?
Here are a few questions that you can choose from:
1. How long have you been a property manager?
◦Make sure they have a long proven track record of managing properties.
2. What types of properties do you manage?
◦Find a company that specializes in your type of property whether it's a single family home, du-plex, tri-plex, quad-plex, apartment or commercial.
3. What type of insurance do you carry?
◦Ensure they carry errors and omissions insurance and general liability at a minimum.
4. How many units are you currently managing?
◦Look for a company that manages more than 50 units.
5. How many property managers does your company have?
◦This will tell you how many properties per property manager they manage. Generally you want to see no more than 50-75 units per manager to provide effective, responsive service.
6. What associations do you belong to?
◦Check to see if they are a member of BBB with a good rating. NARPM and the local realtor associations are common for the property management industry.
7. How many vacancies do you have right now? Out of how many total units under management?
◦This will tell you their vacancy rate and if it's in line with the local market. Around 10% is standard in Bridgeport Connecticut.
8. What is the average length of time it takes to fill a vacancy?
◦Make sure this in line with the local market.
9. What does your lease look like?
◦Ensure you see a sample lease. Most companies will use the local association of realtors lease, which has been drafted by attorneys to comply with local laws, property codes and protect the landlords legal exposure.
10. What is your late rent policy?
◦Ask if they keep the late fee or pass it along to the owner.
11. Do you perform regular property inspections?
◦You want to ensure regular inspections are performed to catch issues before they get out of control. What do they check and how often are they performed?
12. What percentage of tenants do you have to evict?
◦Generally great property management companies will mostly evict tenants they have inherited, as they did not perform the screening.
13. How does the eviction process work here?
◦Some states simply request a 3-day notice before evictions are filed in which the tenant can be evicted in a few weeks. Other states it could take many months and require an attorney to process. When do they start the eviction process?
14. What are your management fees?
◦Most companies charge a percent of the rent and some will charge a flat fee. 5% to over 10% management fees are common in the industry.
15. Are there any other fees (cancelation, eviction, renewal, marketing, account setup)?
◦Make sure the company does not entice you with a low management fee then nickel and dime you with miscellaneous and hidden fees.
16. What do you charge for finding a new tenant and leasing the property?
â¦You will see flat fees and from 50% to 100% of the first months rent for a leasing fee. Ask if the fee includes listing on the MLS and fee to the other broker is paid out of your leasing fee.
17. Do you charge a fee when my unit is vacant?
◦Confirm the company does not charge a fee when your property is vacant.
18. What are my guarantees?
◦Can you cancel your contract with no fees if you are unhappy? Are there any guarantees if my tenant breaks their lease?
19. If I decide to sell my property, do I have to list it with you?
◦Some contracts state you have to use your management company's broker to sell your property if you decide to sell while under contract.
20. How do you market your properties?
â¦Make sure they list your property on the MLS, list on other real estate websites and put a sign in the yard at a minimum.
21. What is your repair process?
◦Is there a maintenance limit they are approved to make repairs without consulting you? Will you receive competitive rates due to volume discounts the company receives from vendors? Will you receive multiple bids if it's a large repair?
22. How do you screen prospects?
◦Ensure in-depth credit, criminal, employment and prior residency checks are performed. What are their screen requirements and approval process?
23. When will I receive my rents?
◦Generally management companies will send owner proceeds between the 10th and 15th of the month.
24. Do you do direct deposits?
◦This will save you time and hassle.
25. Can tenants pay rent electronically?
◦Ensure tenants have the latest online tools to keep them happy.
Thank you for this list. I appreciate your time.
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