As a new landlord or property investor, finding the right property manager might seem like a daunting task. The process of narrowing down the best candidates for the job requires you to dedicate a great deal of time to research and most importantly, to ask the right questions.
To narrow them down to the best choice, you need to determine which property management company shares your ideals and operates in a way that suits your needs.
Finding a suitable company not only takes the pressure off managing a property, but it can also free up your time and maximize the returns on your investment and be the best landlord possible!
We’ve prepared a list of some of the most important questions to ask before hiring a property manager.
What are the services you offer to your clients?
To establish a baseline, you need to know exactly what a property management company is willing to offer. You need to find a company that offers you more than mere marketing, rental collection, and deposits.
A good property management company would go beyond this and offer services such as tenant screening, property inspections, and property maintenance.
How much experience does your founder have in managing property?
Company owners in most cases are at the helm and their experience guides the direction of the company’s employees. Experience is vital in property management, especially in handling situations such as tenant disputes, property damage, lease agreement creation, and tenant evictions.
If the company owner lacks practical experience, they might be unable to effectively manage your property.
What measures do you take when screening the tenants?
To earn a reliable income from real property investment, you need responsible and trustworthy tenants whom you can count on to pay their rents in time and take care of the property.
A thorough screening process is necessary to help you find such tenants and to ensure you gain a healthy return on investment.
Do you have insurance cover?
Unexpected damage and loss of rent may sometimes occur in property ownership. Having an insurance cover will enable you to receive the proper compensation under such circumstances. Insurance companies may cover risks such as fire, vandalism, and other forms of property damage as well as loss of rent and extended vacancies.
What are your company’s price points?
One of the ways you can compare property management companies is by using their pricing structures. Companies may either charge you a flat rate, a percentage of the rents, or a combination of the two in managing your property.
All of these options have their pros and cons and understanding them puts you in a better position to maximize your returns.
Are there other fees involved?
Managing a property involves a number of activities that cost more than what is covered in the management fee. Such activities may include evictions, maintenance, and tenant placement. To get a better understanding of the company’s charges, request for a copy of their contract.
What happens if I cancel the contract?
It is always best to understand what you’re getting yourself into before signing a contract. Understanding all the aspects of a contract will help you to better fulfill your obligations.
However, in case you have a change of heart, you need to know the steps you can take to pull out of the contract without incurring too much loss.
What methods of rent collection do you use?
The methods of rent collection can be an indicator of the efficiency of a property management company. There are a number of rent collection methods, each with its advantages and disadvantages.
The methods used can determine the level of security, the paper trail for accounting purposes and how soon you receive your rental income. Understanding the methods used in collecting rent can help you determine how safe and convenient they are for all the parties involved.
What are your lease renewal and tenant turnover rates?
The tenant turnover rate indicates how often tenants tend to leave the properties managed by the company in question. You can use this rate to contrast with the rate of lease renewals and gain an understanding on how happy the tenants are under the company’s management.
Take a look at the leasing agreement terms they recommend to understand their priorities when managing a property.
The ideal situation would be a low rate of tenant turnover and a high rate of lease renewals. These two rates will also give you an idea on whether your income will be stable or if there are some underlying management issues that need to be addressed.
What are your vacancy rates and the average vacancy period?
It goes without saying, a competent property management company will have low vacancy rates. The vacancy rates indicate a property’s performance on the rental market and can show you whether the company’s rental prices are too high, too low or just right.
There needs to be a balance in the vacancy period. If their properties remain vacant for more than a month, then they probably charge too much for the rent. If the vacancy period lasts for less than two weeks, then their rental prices are too low.
How often do you evict your tenants?
Highly experienced property management companies tend to have very low eviction rates. The rate of eviction speaks to the quality of the company’s tenant screening process. A good quality screening process would reduce the possibility of having problematic tenants thus securing your return on investment.
It is also important to understand how the company handles evictions in the event that it becomes necessary. The sooner the evictions are handled, the sooner they can find a replacement tenant.
Bottom Line
Finding a good property management company might sound like an uphill task, but asking the right questions can help you know more about their values, how they treat people and how they operate.
It's important that you request for a sample of their management contract and other documents such as leases, property owner financial reports and inspection reports to understand the different aspects of their operations.
Here at Limestone Country Properties, we have what it takes to manage New Braunfels, TX properties efficiently and effectively. Our expert property managers put the client’s needs first while striving to maximize your income and maintain your property in tip-top shape. Reach out to us today for more information.
