If you have decided to have rental properties as a part of your investment portfolio, one of the first decisions you will need to make is whether to use a property management company and, if so, which one?
Like properties themselves, no two property management companies are the same. Some manage only residential properties, while others specialize in commercial rentals like retail, office and industrial spaces. As a result, their management styles, experience and size of operations will vary.
So, how do you find the right property management firm to manage your investments?
First, do your research. Online searches for property management firms in your area will yield several results. While we do not suggest judging a book by its cover, a firm’s online presence will give you some insight into its structure, size, experience, and level of professionalism.
Second, remember that you are hiring a property management company to work for you. Treat it like you would any other hiring situation. Interview multiple firms and ask questions until you are satisfied that you have found the right property management company for you.
Here are eight questions to ask of potential property management firms to manage your rental properties.
WHAT IS YOUR LEVEL OF EXPERIENCE?
While everyone has to start somewhere, you likely do not want an inexperienced property manager to manage your properties. The right property management company will have several years of experience and will have addressed nearly every aspect of the property management world, including tenant turnover, maintenance issues, evictions, changes to laws and regulations, among others.
HOW MANY AND WHAT TYPES OF PROPERTIES DO YOU MANAGE?
Property management companies come in all shapes and sizes. Some manage a relatively small number of properties, while others have robust management portfolios that include single-family residential, multi-family residential, and commercial properties. You will want to make sure a property management company specializes in your type of property and then consider multiple property management companies to help you decide what size firm best suits your needs. You may feel more comfortable with a smaller operation, or maybe a larger outfit with a robust and varied portfolio better fits your needs.
HOW MANY PEOPLE WORK FOR YOUR COMPANY?
It can be easy for a company to outgrow its capabilities as it takes on more and more properties to manage. For example, a self-employed property manager probably should not manage scores of properties on their own, but a firm managing 50 properties should not employ a staff of dozens. The number and specialty of people employed by a property management company should allow each property manager to have a reasonable number of properties they oversee. Depending on the size of the operation, a company may also employ full-time maintenance and accounting staff. Ask these questions of companies you consider managing your properties to gauge whether they are appropriately staffed to meet your expectations.
WHAT DO PEOPLE SAY?
A property management company with the right experience and expertise will also have satisfied clients. Chances are you know a person or people who have investment properties as part of their portfolios, so ask people you know for good, old-fashioned referrals. Also, good, newer fashioned referrals and testimonials on Google and the company’s websites will give you a good indication of whether a property management firm is right for you.
TERMS OF CONTRACT
Like with any legal agreement, make sure you know the terms of the contract you will sign with a property management company. Some contracts may seem virtually inescapable, while others may not cover enough ground. Always remember that the property management company works for you, the property owner, and, if you are unclear or uncomfortable with any terms in the contract, ask questions, get clarification and make modifications before signing.
WHAT IS YOUR RENEWAL RATE?
Any property management company with experience, expertise, and that does good work will have a high renewal rate that they will proudly tout this as it is a sign of its success. A firm’s renewal rate shows its capability and a track record of keeping tenants happy.
ARE THERE FEES WHEN PROPERTIES ARE VACANT?
You will want to know if your property management company charges fees during times of vacancy. Make sure you know whether the fees you pay are static or based on percentage rent, so you know what to expect during times of vacancy.
HOW ARE MAINTENANCE MATTERS HANDLED?
Whether a firm employs a maintenance staff or uses a network of contractors, maintenance costs can greatly affect your bottom line. Some property managers charge mark-up fees for their work in arranging property maintenance. Make sure you know how the firm you are employing handles maintenance issues before entering an agreement.
As a leading property management firm in the Cape Fear region, Sweyer Property Management certainly recommends that property owners strongly consider working with a trusted and experienced property management company. Whether you are asking the above questions of us or another firm, we want to make sure property owners and investors understand the relationship they are entering into when choosing to work with a property management firm.
If you have investment properties and do not use a professional management company, we hope you consider doing so. The experts at Sweyer Property Management will be happy to provide you with a free rental analysis or, if you prefer, give us a call at 910-256-3031.
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