How to Identify a Good Property Manager

Before hiring a property manager, there are certain issues that should be reviewed with them:

Setting the Rental Rate

• How do they determine their rental rates?

It's important for a property manager to have knowledge of the local market. It should also be able to perform solid research on the 10-20 most recently-rented comparables to successfully maximize rent.

• How often do they raise rents?

Rental rate surveys should be performed at least annually, and more frequently if there are vacancies or lease renewals.

• Do they put contractual escalators in the lease?

Contractual rent escalators allow the rents to be raised without the need to negotiate, offer an explanation, or give notice.

Collecting Rent

• How is rent collected?

• How do they deal with bounced checks?

After the first bounced check, tenants should be prohibited from writing personal checks until at least 6 months of good payment history has been established. Additionally, there should be a provision in the rental agreement that says tenants agree to pay the maximum the law allows for all returned checks.

• How do they deal with delinquent payments?

• What is their current rate of delinquency?

A good property manager should not allow things to get out of hand.

• When is rent due? Is there a grace period, if so how long?

• How much is the late fee?

• How do they handle evictions?

The higher the number, the less confidence you should have in the screening process of the property manager.

• How quickly do they usually get repossession of the property when an eviction takes place?

Property managers should be able to contain and eliminate problems as quickly as possible.

• Do they provide eviction insurance? 

This is a small monthly fee that ensures that the management company will pay for all attorney and court costs associated with evicting a tenant they placed. It is not a widely offered service, but it is a valuable service that speaks to the property management companies’ confidence in their screening process.