How to Choose a Property Management Company

Property management companies can be a great way to enjoy the financial benefits of owning income producing property without having the strain of day-to-day management. Knowing that you have a professional that has your back 24-hours a day can really take the stress out of dealing with a tenant’s needs and demands, property repairs and other issues common to rental property.

The question, however, is how do you choose a property management company? This article is going to present some tips to help you make a good choice – one that you will gladly recommend to others.

Get Recommendations and Referrals

Perhaps the best way to find a good property management company is to ask around. Have you attended any local Real Estate Investment Clubs lately? If so, take the next time to ask who other local investors are using for their property management company. Find out why they chose them; how long have them been working together and why they like this company. You can also ask your real estate agent, tax accountant or real estate appraiser who they would recommend and why. If someone you know is happy with their property management company, then most likely you will have that same level of satisfaction.

Check Their Qualifications

According to the North Carolina Real Estate License Law, all business that perform property managerial tasks such as advertising rental property, leasing, preparing property management agreements and other related duties are required to be licensed by the state.

That does not, however, mean that all property management companies are the same. Just as not all doctors, lawyers or real estate agents offer the same level of service. It is prudent to check and see how long the company has been in business. Do they sell real estate as well and manage? If so, then they are available to provide multiple services in the event that you would like to expand your portfolio or reduce or change the number or types of rental properties that you own.

You should also find out how many clients do that have at this time and how many units are their staff managing. In addition, ask how many times a year do they physically inspect the units that they manage. Ask for a few names and numbers of current clients and then check and see if they are satisfied with that company’s service and why.

Pick the Services You Need and Want

A good property management company will offer services that are tailored to the needs of their clients. Some clients only want to see a check in the mail each month. Others prefer to be semi-involved in the management. They may want to approve the tenants after the PM goes through the background check process. Some property owners want to be notified of all repairs regardless of the cost.

That being said, if you want a good property management company, then first decide what services you would like them to perform, or better yet, how involved you would like to be and then interview several companies to see if they can provide the level of service that you desire. This should affect their fee as well. Most real estate management companies will charge between 7 and 10% of the gross rents. See what is included in their fee and then start negotiating from there. If they are a one package fits all type of service, you may want to keep looking.