You have decided to hire a property manager. Great! It’s important to realize, though, that not all property management companies are created equally. Levels of experience can vary widely, as can the rates that property managers charge. Some may leverage new technology, while others may be operating the same way that they did decades ago.
Just as you’d do your due diligence on an investment property, you should do your due diligence on prospective property management companies. After all, they’re who will be caring for your investment on a daily basis. Here are 15 basic questions to ask in a property manager interview.
- Which property management services do you currently offer?
Not all property management companies offer the same services. Be sure that this company offers a full suite of services that meets your needs.
- How many rentals do you currently manage?
This will help you to gauge the company’s size and expertise. Be sure that the company isn’t stretched too thin given the size of their staff.
- Do you manage any other rental properties in my area?
You want to be sure that your property management company understands the nuances of your local rental market.
- Which areas does your company service?
If you own or are considering investing in properties in multiple cities or towns, having a large coverage area could be beneficial.
- Which types of properties do you manage?
A property manager who manages single family rentals will have a different approach than someone who manages apartment complexes. Be sure to find someone within your market niche.
- What are your monthly management fees?
Management fees generally run anywhere between 8-12% of total monthly revenues, but can vary depending on the services offered.
- Do you collect management fees when a unit is vacant?
If so, run away. Property managers should be incentivized to lease units quickly–and forfeiting a portion of their fee in the meantime is generally the industry standard.
- Can I cancel my contract without penalty if I’m unhappy?
Avoid companies that try to lock you into a contract. You should be able to switch management companies if the service is sub-par.
- Are there miscellaneous fees that I should expect to incur?
Some companies charge extra for marketing units, evicting tenants, turning over units, etc.
- What’s your procedure for qualifying tenants?
Learn whether the company uses background, employment, credit, and landlord reference checks as part of their screening procedures.
- What is the average vacancy rate among the properties you manage?
Consider whether this vacancy rate is above or below the area average.
- How long do units typically stay vacant after turnover?
Look for companies that will have units rent-ready and leased up again within 30 days, which should give them plenty of time to refresh the unit and perform any repairs.
- What’s your process for handling service requests?
You’ll want to know what the process is for tenants to communicate service requests to the PM.
- Will you be able to provide me with investment advice or help me to grow my portfolio?
More advanced property management companies will be able to help you to identify market opportunities—whether through the purchase or sale of assets—and help you to position your assets in a way that maximizes your return on investment.
- Do you personally invest in real estate?
If so, that’s a good sign—it indicates that the property manager has an investor’s mindset and will hopefully care for your property the way that they care for their own.
Depending on your specific circumstances, you’ll probably have other questions to ask potential property managers; but this list of 15 questions to ask in a property manager interview is a good starting point.
You likely already know this, but always be sure to meet with property managers in person before deciding to hire them. This will give you a better feel for the person. For instance, was he on time? Did he seem organized? Was he transparent in sharing information with you? It’s easy to hide behind a guise online or over the phone; in-person conversations reveal so much more.