How do you select a property manager?

Question

For investors who use property managers what do you look for in your property managers? How do you select who to move forward with? What do you prioritize the most in your decision?

Also, what kind of investment properties do you have managed?

Harrison C. · Answer

I self-manage, so this is what I would check if I ever handed it off, with a bit from the rent-by-the-room side.

Ask for a real owner statement from a current client, names blanked out. If one page does not tell you what rent came in, what was spent, on which property, and what is left, the report will not get clearer once you sign.

Add up every fee for a year, not just the monthly percentage. Leasing fee, renewal fee, markup on repairs, late fees the manager keeps, a fee to set up or to leave. The monthly number is often the smallest one.

Get the repair limit in writing: the dollar amount they can spend without calling you first.

Ask how many days their vacancies sit for your kind of property and what they actually do on day 15 with no applicant.

If you rent by the room, ask whether they do one lease per person, collect rent from each person separately, and can fill one room without touching the others. Plenty of managers only work one lease per house.

Then read the termination clause before anything else: how many days notice, any fee to leave, and how fast the leases, deposits and tenant records come back to you.

What kind of properties are your clients mostly asking about in Phoenix?

Ming Yi · Answer

The first thing I ask is what kind of properties they actually manage day to day. A manager who runs 200 apartments will treat a single-family house differently than one who specializes in SFRs, and that shows up in how they screen tenants and handle maintenance. Ask how many doors each manager carries, because one person juggling 150 units is not going to return your calls quickly.

Get the fee picture in writing before you sign anything: monthly percentage, leasing fee, renewal fee, and whether they mark up maintenance. Ask who does the work, in-house staff or outside vendors, and what dollar amount they can approve without calling you. Ask to see a sample monthly owner statement and how fast they respond to owners, not just tenants.

References matter more than the sales pitch. Ask for two or three current owners you can call, and check reviews plus any complaints with the state licensing board. Start with one property, not your whole portfolio, and see how the first 90 days go before you hand over the rest.

Drew Sygit · Answer

We’re a Property Management Company (PMC) in Metro Detroit ONLY, with 25+ years of experience, and we’ve seen owners make the same mistakes, over & over again when looking to hire a PMC – which drives us nuts!.

In our experience, the #1 mistake owners make is ASSUMING all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY.

So, owners mistakenly think price is the only differentiator – and look for a PMC like they’d shop for groceries☹

We encourage you to learn from the mistakes of others by reading posts here on BiggerPockets from owners that picked a PMC solely by price and regretted it.

We recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

﻿Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Even if someone gives you a referral, do NOT make the mistake of assuming that just because a PMC met their expectations, they’ll meet your expectations. We all have our own expectations and what works for someone else, may not work for you.

If you’re new to all of this, it's often a case of not doing enough research, as you don't know what you don't know!

So, ask more questions!

﻿EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

﻿﻿A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

BJ Everson · Answer

@braedeni2 Braeden, good question to ask before you sign. Harrison's tip about asking for a sample owner statement is a good one. A few more for 1-4 unit owners:

• Read the management agreement, not just the fee page: leasing fee, renewal fee, any maintenance markup, the repair amount they can approve without you, and how you terminate (notice period and any fee).
• Ask how they set rent and how long their vacant units sat over the last year.
• Ask to see their written screening criteria and how they apply them consistently.
• Ask where security deposits are held and what day owner draws go out each month.
• Ask for a sample move-in inspection report with photos. It shows you how they'll document damage at move-out. What type of property are you looking to place?

Read the management agreement, not just the fee page: leasing fee, renewal fee, any maintenance markup, the repair amount they can approve without you, and how you terminate (notice period and any fee).

Ask how they set rent and how long their vacant units sat over the last year.

Ask to see their written screening criteria and how they apply them consistently.

Ask where security deposits are held and what day owner draws go out each month.

Ask for a sample move-in inspection report with photos. It shows you how they'll document damage at move-out. What type of property are you looking to place?

Aleena Merilien · Answer

Braeden, one angle that hasn't come up much is how a manager communicates when something goes wrong. Ask for a recent example of a maintenance issue or guest or tenant dispute and how the owner was told, how fast, and who made the call on the spend. Also ask who is on the other end of the phone: a dedicated contact for your property or a shared inbox. Request references from owners with a similar property type to yours and ask them about the first 90 days, since onboarding is where gaps show up. Finally, confirm exactly what is billed on top of the management percentage, and what the exit terms are if it isn't a fit.

Disclosure: Guest Haus Company is where I work; we support owners with listing, pricing, and guest communications.

Matthew Morrow · Answer

Braeden, I would not choose a manager based on the advertised fee. The cheap fee is often made up later in maintenance markups, slow leasing, or poor screening, and that costs more than a slightly higher management percentage.

I'd ask for a sample owner statement, their written screening criteria, how long their vacant units actually sat over the last year, the repair amount they can spend without your approval, and how you can terminate the agreement. Then I'd call two or three of their current owners, not just the references they volunteer. I care most about communication and tenant screening. If those are weak, the rest of the relationship usually follows.

Sharaline Joseph · Answer

When selecting a property manager, I believe investors should look beyond just the management fees. The most important things to consider are communication, transparency, accountability, experience, and the ability to protect and maximize the property's performance.

A good property manager should be proactive, keep owners informed, understand the local rental market, have reliable maintenance and vendor relationships, and, most importantly, treat the investor's property as if it were their own.

I would also look closely at how they handle tenant screening, rent collection, property maintenance, financial reporting, and challenging situations such as evictions or unexpected repairs. You want a management company that doesn't just react to problems but works to prevent them.

As for the types of investment properties, I work with a portfolio that includes single-family rentals, multifamily properties, and vacant investment properties, primarily in the Detroit, Warren and Eastpointe, Michigan market.

Ultimately, I believe the best property manager is one who gives investors peace of mind, protects their assets, and helps them achieve their long-term investment goals. It's not just about managing properties; it's about building a relationship based on trust and delivering results.

Alik Levin · Answer

I'd start with full list of fees, not just what's advertised online. Next their relationship with service company - in house or partners and how fees/markup structured of any. If the PM company high volume with low teaser fees, figure out how they cover for their overhead and how much attention your properties get among the rest. Additionally, what's their relationship with legal services provider when SHTF who's to help you to resolve the disputes with tenants, that should give a solid start for a meaningful conversation.

Denise Supplee · Answer

For me, the biggest thing is trust. I want a property manager who communicates, follows through, and actually pays attention to the property. I also wouldn't choose based on the lowest management fee. A cheap manager can get very expensive if they don't screen tenants well, miss maintenance issues, or don't communicate when there's a problem. I'd owned and managed single-family rentals and small multifamily, and those are the things I'd look at regardless of the size of the property. I want to know how they handle tenant screening, inspections, maintenance and vacancies before I hand them the keys.

James Jones · Answer

I run an in-house team at Memphis Passive for 236 single-family rentals, so I look at this from the operator side. The first test is fit: do they manage single-family 3BR+ homes like mine every day, in the same ZIPs, including Section 8? A manager who knows the Section 8 payment standards, inspections, and rent range of $1,395-$1,950 in my market will lease faster than one learning it on your house. Ask how many doors they manage in your exact area, how long vacancies sit, and how fast maintenance gets picked up and finished. Get the full fee picture in writing, not just the monthly percent. Then ask to see a real owner statement. If the numbers are not clear on one page, walk away. What type of property and market are you hiring for?

How do you select a property manager?

How do you select a property manager?

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