The decision to hire a property management company is one that most landlords will face at some point in time. Maybe you’re new to the world of being a landlord and you’re just not sure about how involved you want to be in the daily operations of the property or perhaps you’ve been managing the rental properties you own for a while now and you simply want to take a step back and earn truly passive income. Whatever your motive for considering a property management company, it’s important that you educate yourself on how to choose one, what questions to ask and what to entrust them with.
Research Your Options
Before you bought your investment property, you spent time studying all of your options. You made a decision based on which property you believed would give you the biggest return on investment. You should view the property management company that you’re going to hire as another investment which requires the same amount of study.
Start by talking to other property owners that you know and find out what property management company they use.
So much of property investment is about networking, so use the contacts that you’ve picked up and find out who they’re using to manage their properties. Also, find out information about property management companies they may have used in the past that didn’t pan out. The more information that you have, the more secure your investment will be.
If you want more options or don’t’ have any landlords to ask, you can do your own research online. Run a Google search for property management companies in your area and find the ones that have the best reviews. Spend some time looking at positive and negative reviews and make a list of companies you’re considering.
You don’t have to hire the first property management company that you run across online or through a friend. Make an appointment with all of the property management companies in your area that you’re considering and interview them. Remember, they’re vying for the opportunity to work for you. They only make money if you hire them. Treat every meeting with each property management company like a job interview where you’re gathering information about potential candidates. But now you need to know what questions to ask.
What Fees Do They Charge?
Property management can charge a variety of fees. Management fees, vacancy fees, leasing fees, set up fees and more can lead to you spending a lot of money even if you don’t have tenants in place. Get a clearly explained written copy of any fees that each property management company charges. Remember, your property is an investment and you’re hiring a company to help you protect it. You can’t protect it if you’re spending all of your profits on fees each month.
What Services Do They Offer?
Not every property management company operates the same way. You should have a list of services that you’re expecting from the property management that you choose. If a prospective property management company doesn’t offer many of the services that you need, you can confidently walk away and know that they’re not the right fit for you. The point of hiring a property management company is for you to transition into being a passive real estate investor. If you’re going to be passive, you need a property management company to handle all of the day-to-day details for you.
How Experienced Are They?
While some startup property management companies may be a good choice, you probably don’t want to trust your investment with someone who has never done this before. Ask the companies that you’re interviewing about how many properties they’ve managed in the past and how many they are currently managing. Look for properties that are similar to yours in their portfolio. This ensures that they know how to handle properties similar to yours which gives you the assurance you need.
It can be difficult to relinquish control of your investment property to a property management company, but it can also allow you to enjoy life as a passive real estate investor. Find a reputable company that you can trust and start sitting back and collecting the monthly checks that your property generates.