How To Avoid Bad Property ManagersJun 13, 2022
A landlord or real estate investor hires a property manager to handle their daily operations and responsibilities. However, not all property management companies are good coordinators. Some would negatively affect your investment by setting unfair prices for your rental, neglecting maintenance requests, or conducting mistakes in leases.
So, you must make a short list of your requirements before hiring a property manager and ensure they’re worth their weight on gold.
Questions to Ask a Prospective Property Manager
How long have they been managing?
Not all newcomers to the industry are low-quality, but it’s still important to know how many years they’ve been in business because experience matters.
What is their current vacancy rate?
Expect their current vacancy rate to be what you can expect in the future. It is helpful to compare this number from several firms.
Do they have a maintenance crew?
This is a plus as long as the fees are reasonable.
What kind of property do they manage?
It’s better to manage fewer properties because it allows for specialization. You want them to specialize in the type of property that you own.
Do they manage property exclusively, or do they also provide brokerage services?
Specialization is also essential in this aspect. Many realtors take on property management as a side endeavor without fully committing the time and resources to master it. You don’t want this.
How often do they send out checks and reports?
This should happen at least once a month. Anything less is unacceptable.
How often do they have to evict tenants?
This indicates how well they screen tenants because good property managers should have a low tenant turnover rate.
What are their fees?
There are more fees than just the management fee.
How does their management contract address contract termination?
Thoroughly review their management contracts.
Are they licensed?
They should 100% be licensed.
What certifications do they have?
For each type of real estate, a trade organization provides training and certifications for professionals in that industry. Look for certificates from organizations like CAI, NARPM, IREM, NAA, and BOMI.
These are not required, but they are a good sign that the company takes its profession seriously and is committed to ongoing education in its field.
Wrong Signals to Look Out for
Some red flags can make you wary of potentially troublesome property managers. Always look out for them:
Property managers are expected to be on call for emergencies 24/7/365. Also, firms should not be closed on weekends because it will cost you lost rent from not showing your vacant units on the weekends.
Lack of responsiveness
Property managers should be easy to contact and get a hold of. This is important for doing business and because you don’t want a tenant to get the answering machine when they have a severe emergency requiring immediate attention.
Unwilling to provide the reference
They should be willing to let you talk to past clients.
Unpleasant and unprofessional demeanor
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