10 Questions to Thoroughly Vet Potential Property Management Companies

by | BiggerPockets.com

I can’t get over a quote I read a few weeks back on BiggerPockets. It was something like, “An average investment with a great manager is better than a great investment with a bad manager.” It got me thinking how owners can screen property management companies, which can eventually help them out to manage the properties well without any hassle.

There are multiple factors that are involved in finding a good manager or a management company. Below are 10 important things that an investor should seek out in a management company before hiring them.

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10 Questions to Vet Property Management Companies

Is the project manager experienced enough to handle your type of asset?

Don’t hire a single family home or a condo guy or company to manage an 18-unit building. It would be a mess because they won’t be able to handle the pressure.

Is the company is built around a team?

They should have different departments that will help in managing different aspects of the property. For example, the accounts department should manage the rent, the repairs department will look after the repairs and renovation projects, etc. If there is only one guy who is solely responsible for everything, you might get in trouble if he/she goes on a vacation. Don’t put all your eggs in one basket.

team

How many units do they manage?

Managing just 100-200 units may mean they are not too profitable, which can hurt their stability if they are unsure about how to grow. You need someone with experience, structure and stability.

Are the owners or team members investors themselves?

Do they know the pain of vacancy or understand trying to skirt the grey line of bottom line efficiency, customer service, and safety?

Related: 80 Smart Questions to Ask BEFORE Hiring Your Next Property Management Company

How much maintenance do they handle?

Is there a house maintenance team? The more a project manager can handle in house, the more control in pricing your manager has for your bottom line.

How long has the company been around?

Have they made it through a recession or slow times? Most entrepreneurs learn various lessons the hard way in the first 5-7 years. Is your new company past that, or are you at risk of being one of their lessons learned?

What KPIs do they track?

A company that tracks KPI can see problems or trends before they happen.

property-management-team

What is their overall online reputation?

What comes up on first three pages when you Google them? Where there is smoke, there is fire.

What technology do they use in their business?

Are they using modern technology to manage your property more efficiently, or are they still using outdated methods? This will include project management software, marketing and KPI tools, etc.

Related: The Compelling Reason to Consider Hiring a Property Manager For Your Rentals

How does their marketing look?

Look at their priorities. How great or poor of pictures do they take? What does “rent ready” look like to them?

Finding satisfactory answers to these important questions can help you find the ideal project management company that could assist you in fulfilling your dream of creating passive income.

Do you guys have any other important questions to add to this list?

Leave all your suggestions below!

About Author

Mark Ainley

Mark Ainley is founder of GC Realty and Development and GC Realty Investments. Mark has been an active real estate investor since 2003. He started slowly by flipping condos and acquiring a couple of investment properties. Since 2003, Mark and his team have successfully renovated and stabilized over 200 properties.

7 Comments

    • Mark Ainley

      Key Performance Indicators. These are stats on items such as how much an average turnover costs in your operation, what you average cost of maintenance is per month across a portfolio, vacancy numbers, amount of rent collected before the 15th of the month or after the 15th, average rent amount are all examples. They are numbers you track to identify problems before they become problems and/or find areas to improve the operation. Without KPI’s a company doesn’t even know what they do good or bad.

  1. Jean Lespinasse on

    Probably the worst article I\’ve read on how to vet a property management company. The name of the game is understanding your specific needs as an owner and what your goals are. Dismissing a property management company because they manage singles and condos and won\’t be able to handle the pressure of an 18 unit apartment or have 100-200 units under management is a poor vetting criteria. What pressure exactly are we talking about? Additionally, how can someone make a blanket statement that a company with a 100 -200 units is not profitable? Most property management companies who are considered large companies 1000 units or more was at some point in their growth cycle 100 – 200 unit is size before growing larger. The article does make a valid point regarding maintenance capabilities. An in house management team does give the company the ability to control cost, but with property management there are other variable that impact the bottom line other then cost control. Ultimately, the article seems to be light on detail and heavy on blanket statements that don\’t take into consideration the specific need and goals of the ownership.

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