Let's face it. You can't do it all. Managing your own residential rental property can be a hassle, especially if you don't have the time, skills, or knowledge to do it well. But turning your property over to someone else to manage can be intimidating.
How do you choose a property management company that's going to take care of your home the way you would?
Here are 6 tips for choosing a property manager that’s right for you.
Look for a list at the end of sample questions to ask when you’re interviewing your future property manager.
1. Go local.
When selecting a company to care for your home, you want a firm with deep knowledge of the local market and all relevant federal, state, and municipal laws. You also want someone with deep connections to the area's trusted maintenance and repair businesses. A local property management company with roots in the community will have the know-how to be able to serve you best.
2. Check out referrals.
It might only take one conversation with your real estate agent, neighbor, or friend to get a list of property management companies. But follow up on all the referrals. Check review sites like Google, Facebook, or Yelp to gain additional insights and perspectives. While it's true some people tend to vent on review websites after a negative experience, these sites offer a convenient place to gain a more complete picture of a business. You can also check out any referral with the Better Business Bureau to make sure the company has no complaints.
3. Decide on a large firm or boutique experience.
Property management companies come in all shapes and sizes. It can be a single person, a small company, or even a larger enterprise. Which one is right for you? With an individual, you might worry that you won't get the full range of services you need. With a larger company, you might worry you'll just be another name on a list. Think carefully about the level of service you need as a property owner and choose based on your preference. In addition, opt for residential property management companies over those more focused on commercial properties. Those who specialize in the long-term residential rental market are likely to have more experience effectively handling the many niche issues that come with it.
4. Aim for a full range of services.
Depending on whether you go with an individual property manager or a property management company, be sure you're getting the most bang for your buck. A full-service property management company should be responsible for all the rental marketing, applicant screening, legal documentation, property inspections, rent collection, accounting and reporting, and maintenance. If you are interested in real estate as an investment, choose a company that can renovate and sell investment properties, as well.
5. Make sure the property manager is licensed.
California business and professions code 10130 specifies that a property management company must possess a broker license issued by the California Department of Real Estate. Property managers who recruit tenants, negotiate leases or collect rents also are required, at minimum, to have a salesperson license and be associated with a broker who conducts a property management business. If you expect a property manager to carry on any of those acts on your behalf, be sure they are properly licensed in the state.
6. Listen to your instincts.
Like so many things in life, trust your gut. Take a look at how the company presents itself online and offline. If they can’t market themselves well, will they be able to market your home and attract tenants? Do not forgo a one-on-one meeting with a property management company before deciding if it's right for you. Come prepared for the interview and have your questions ready.
Do you hold a license for property management?
- Verify the license is active and if they have any violations with the DRE.
What kind of services do you offer?
- What is required from me as the owner on a monthly basis?
- How does the owner receive payment and when can I expect it?
How many properties do you manage?
- If you have several front doors you are looking to have managed, ask if the property manager has the bandwidth to manage that many more front doors.
- Who is my contact? Do I contact the same person for all questions? (Maintenance, accounting, vacancy filling.)
- How often does the property manager get eyes on the property?
What are your management fees?
- Are additional fees added to maintenance invoices?
- Can I expect an annual rate increase?
How do you decide on the rent?
- Do you give the tenants annual rent increases?
How do you screen the prospective tenants?
- Credit score and income requirements?
- Referral checks?
- Pet policy?
After thoroughly vetting the property management company, take the time you need to assess your comfort level with what you’ve learned. Do a gut check. Do you feel comfortable leaving your home in the care of this company? Look at things from the side of prospective tenants, too. Would you want to rent a home from this person?
Choosing a property management company is a critical decision that can make all the difference in whether you have a hassle-free experience or one plagued with problems. Put in the extra effort to find a company that will represent your interests and safeguard your property as you would. You’ll be happy that you did!