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Monday, 03 August 2020 13:49

What to Ask Before Hiring a Property Manager 

A property manager has to possess numerous skills, not the least of which is being a master juggler. They have to handle the day to day operations of the property, balancing the logistics of marketing, vetting prospective tenants, building waiting lists, executing terms of leases, undertaking repairs and upgrades, navigating tenant concerns and disputes, and much more. The reality is that not everyone is up for the job. Hiring a property manager is one of the most critical investments you will make as an owner/investor - and if you get it wrong, you can see profitability drain away from your bottom line. If you get it right, well, then you can realize your portfolio- and wealth-building goals. 

Let’s get it right. To do this, be sure to ask key questions during your hiring process.

 

Questions You Should Ask Before You Hire a Property Manager

What Services Do You Offer?

To ensure you are receiving the services you need - and paying the appropriate price - it is essential that you clarify what you expect and what the prospective property manager can deliver. Do you want a full spectrum of services, from marketing to managing to maintenance? Make sure you get what you need. 

How Many Units Do You Manage?

You’re looking for a happy medium. If they do not manage many units, they may be inexperienced and/or previous clients left because they were unhappy with their service. On the other hand, managing too many units can indicate that yours will not be a priority. What’s not enough and what’s too many? It depends but you may look for those who effectively manage between 200-600 rental units.

How Are Management Fees Assessed?

Fee structures vary; some companies charge a flat rate, while others charge a percentage of gross revenues. It’s advisable to go with a percentage. Why? This gives your property manager extra motivation to fill vacancies in a streamlined manner and to adjust rents upwards (but fairly for the market). 

Another reason to opt for a percentage is that some companies offer a low rate - but then tack on extra fees for services that you thought were covered. Maintenance Is one of these areas; some companies charge each time they have to complete a maintenance task, and this can quickly eat away at profits. 

How Are Rents Determined? 

Determining appropriate rents is one of the most critical jobs a property manager handles for you. It affects everything from vacancy levels and tenant satisfaction to profits. To set the right amount, they must conduct a market analysis of available listings in the area, properties that just went off the market, and those that are currently on the market. It is also essential that they factor in special amenities you offer (e.g. pool, fitness center, new kitchens, energy-efficient appliances, etc). 

How Do You Market the Property/Properties?

Marketing is a crucial task for building owners and their property managers. You need to make sure you keep vacancies low and have a steady pipeline of people who want to move in. Are they utilizing multiple tools, including digital listings and ads to entice renters?

How Long Are Your Average Vacancies?

Be reasonable: after a tenant moves out, there needs to be a period for repairs, maintenance, and upgrading (if necessary) the unit. It may need to be repainted, for example, or new carpet may need to be installed. Look for an average of two to four weeks. If the property manager is seeing vacancies last much longer, they are not effectively sourcing tenants. On the other hand, if the vacancy average is less than two weeks, it can indicate that the rent is set too low.

What Are Your Income/Screening Requirements? 

While appropriate income and screening standards vary depending on factors such as the neighborhood, building class, etc., it is important that your property manager has firm requirements - and sticks to them - so they can be sure tenants will make rent. 

Some other questions to ask:

  • Can I cancel my management contract?
  • Do you do unit inspections? How often? 
  • How do you collect rent? (Look for those that offer online options)
  • How do you remit the rents? 
  • How will you communicate with me? Who is my contact person?

Listen to What They Say - And How They Say It

As you are interviewing potential property managers, listen to the content of their answers but also pay attention to their style of communication. This is a critical skill in this role. Are they knowledge? Pleasant? Respectful? Organized? Calm? Truthful? Did they come to this meeting prepared and ready to go? Did they present themselves in a professional manner? 

This person will be the “face” of your property, the person with whom your tenants will have the most contact. It is imperative that they represent you effectively. 

Whether you have questions or want to ask us questions about professional property management, don’t hesitate to contact Asheville Phoenix Properties about your needs