But... the keyword here is great. If you hire a great property manager, they can do all of this, and even more! So don’t hire until you make sure they check all of these critical boxes:
1. Property Management Experience and Current Client Load.
Previous property management experience should be a non-negotiable. It is crucial that the people to whom you entrust your buildings know the ins and outs; you don’t want to deal with a situation where you’re essentially training them. They should be able to hit the ground running.
You also need to know that they have the capacity to handle your units. If, for example, they handle too few units currently, it can indicate that they lack experience or they have difficulty retaining clients due to subpar results.
On the other hand, if they too many units under their management without a good ratio of experienced employees, your properties risk getting lost in the mix. Don’t be afraid to channel your inner Goldilocks: look for “just right.”
2. Included Services and Fees.
Not all property management companies offer the same level of service. What are you looking for? If you want to take a hands-off approach or earn passive income even if you live on the other side of the country, a comprehensive suite of services is essential.
Will they handle the expected tenant issues? How about setting appropriate rent rates? Screening prospects? Marketing your property? Managing vendor relationships? Ensuring your properties are in compliance with applicable housing regulations and laws? Maximizing profitability?
And what do they charge for these services? How are these fees assessed? Is it a flat fee? Based on rents collected? Be sure you understand the terms of any agreement and that you and the property manager are on the same page.
3. Real Estate Market Knowledge.
It is important that property managers have the ability to navigate the complex and ever-changing world of real estate. Why? This allows them to effectively market your property by highlighting sought after features based on comparables in your area, set rental rates, source potential tenants, leverage existing vendor relationships, etc.
When you’re going through the process of screening and hiring for this position, check the credentials of potential property managers. Are they BBB accredited, for example?
Prospective tenants must provide references; hold potential property managers to the same standard. Ask for the names and contact information for at least three to five of their current and past clients. Make sure to follow up. Were they satisfied with the service they received? Did they have any unexpected issues? Were rates commensurate with the work delivered?
This is more subjective, but attitude is critical nonetheless. When interviewing or interacting with a prospective property manager, take note of their demeanor and style of communication. Do they listen respectfully, or do they cut you off? Do they remain calm and courteous? Are they firm and fair?
Ask scenario-based questions. For example, “Have you ever handled an eviction? How did you do that?” You can gauge their ability to comply with your expectations and the law, as well as their ability to manage contentious situations.
Remember, this person or company is going to be the “face of your property,” so to speak. You need to ensure their attitude aligns with your needs - and doesn’t become an obstacle in and of itself.
When searching for a property manager, don’t hire unless they check off all of these boxes. Your properties, your investment, your income, are too important to leave to chance.