One of the biggest decisions you will make as a landlord is whether you should hire a professional property management company. A good property management service can be a huge asset when you are investing in rental properties.
A good management company brings local market knowledge, keeps current on landlord and tenant laws and adds know-how and experience to making sure your rental property performs. A good property management company can be a vital piece of the puzzle in your organization.
When interviewing property management companies there are a number of items to consider and I feel this lists is the Top 10 Things To Look For In A Property Management Company.
1. Communication is probably the most important on the list. The way your property management company communicates with you the owner, prospective residents, vendors is KEY to your business investment.
2. Experience: The amount of experience in the real estate industry, especially the field of property management is very important. You should ask if all staff members are licensed. Asking a lot of questions about the general market for your area will alert you to how in-tune the management company is.
3. How many staff members: The amount of staff vs. number of units is a direct correlation of the quality and effectiveness of service that you will receive.
4. How does the eviction process work? There are times in this business where you will have to do an eviction. Ask the property manager how many evictions they have had to perform. If this number is high, it could be an indication that their tenant screening process needs work. Ask how much it costs to file an eviction. Every management company should have a standard procedure on how they handle evictions according to state law.
5. What type of contracts will be used: This will apply to your rental lease agreement, your property management agreement, Take time and review all of these in detail and make sure there are no surprises.
6. What type of accounting software will be used? There are many superior accounting and reporting programs from property managers to use. Some will offer online payment from tenants, some offer website portals that owners can log in to view the status of their properties. Ask questions as to type of software, what days reports will be generated and owner payments processed.
7. What are the fees? Make sure that you have a good understanding of the fees you will be charged for their services. There is a management fee and this is around 10% of gross rents per month, there is usually a leasing fee associated with new leases, and often times there is a renewal fee associated with lease renewals.
8. What type of tenant screening will be used? Proper screening of potential tenants is one of the most important services your property management company can provide. Ask to see a copy of their leasing criteria that is used in processing applications. A good property management company should be doing income verification, credit report, criminal background report, and eviction history report, and verifying previous rental history. The goal of course is to find you the perfect tenant!
9. How will your property be advertised? Which websites will your home be advertised on? Will it be listed on the MLS? How will the property be shown? Take time and review the websites and preview your ads, I recommend touring the property once it is considered " rent ready" to determine if the home is being presented at its best.
10. Ask for references: This is HUGE! You are going into business with this company and you want to know that you are working with the best. Ask for 2 -3 references of other investors who are using their services.
The list can go on and on, however, I do feel that this is the Top 10 Things To Look For In A Property Management Company.
If you are in the Waco Texas area and need property management services, I would love to talk to you!