The best way to find the right property manager is through a referral. If you know of anyone or any company already using one, go ahead and ask for a referral if they’re happy. Don’t just assume they’re the perfect match though. Go to Google to find property managers and check reviews. However, not everyone has the benefit of getting a referral from someone. If you are one of those people, you need a strategy for finding a great property management company to work with.
Compare & Contrast
Find a few companies you like. Contact them on the phone and ask the property manager questions. Listen to their response and how they handle themselves. See if you can stop by their company to meet them in person. Make sure their office is uncluttered and professional-looking. The employees working there should be professional and treat you with respect.
All of your communications should be professional and done promptly. If it takes days for them to get back to you before you sign a contract, it will only get worse once you actually do. Look at their website to make sure it looks professional and contains good information. Don’t be afraid to ask questions until you’re comfortable.
It’s important to look for a property management team near you. The company should know the area where your buildings are located so they’re familiar with local codes and laws they need to enforce and adhere to.
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However, those aren’t the only things to be mindful of when hiring a property manager! There are a few other qualifications you should make sure the person or company you hire has, including:
1. Professional Licenses & Certifications
There are some states that do not require a license of any type. Other areas allow people to manage a building while possessing only a real estate license.
The good news is that you’ll avoid a lot of hassle if you make sure the person or company you hire has more qualifications. This will prove they have the technical expertise you need to get the job done right.
Do this by:
- Checking to see if their real estate broker’s license is current
- Have professional affiliations of any type
- Are certified to manage a property
Once you’ve done this, there are a few certifications you’ll need to look for:
- NARPM is the National Association of Residential Property Managers. This focuses on single-family homes and small residential properties.
- RMP is the Residential Management Professional which means they’ve completed their initial training and vetting process.
- MPM is the Master Property Manager which means they are more experienced.
- CRMC (Certified Residential Management Company) means a company has achieved and demonstrated the highest levels of professionalism and has received the Preferred Residential Management Company designation.
- You’ll save a lot more money in the end by hiring the most qualified professional because they know what mistakes to avoid.
2. Specialized Experience
One of the reasons to hire a property management company is that it’s very complex. There are federal, state, and local laws to contend with.
When looking to hire a property manager, ask them to show you a proven record of handling all the variables that managing homes and tenants come with. Make sure they’ve been working in the industry for at least a few years.
Also, make sure the person or company you’re looking to hire has at least some experience caring for your specific type of investment. Some property management companies focus on commercial properties and don’t understand the differences in residential properties.
You should make sure the person you hire can also handle the number of units you own. Someone who has only managed small properties with four units may be completely overwhelmed handling the issues that arise when managing a high rise with over a hundred units.
3. A Solid Reputation
Thankfully, it’s easier than ever before to scope out a potential management company before you formally hire them. Making sure they have a solid reputation needs to be a priority.
Check them out on the Better Business Bureau (BBB) website to ensure their rating is a B or better. Next, research your state and/or local governing agencies for the industry in your area to find out more information.
You can also check out online review sites and Google to get a better understanding of what their tenants are saying. While a landlord may love a property company because they don’t have to handle issues, a poorly run management company means you may end up with a bunch of vacancies because they’re mishandling your building.
4. Low Vacancy Rates
You want to hire a property manager who keeps tenants happy enough to stay year after year. Make sure you don’t hire a company with long vacancy times in between tenants.
Ask the company how fast they are usually able to get properties on the market. If the company has a great vacancy rate, they’ll be more than happy to share this information with you.
5. Strong Policies
You should always work with others who share the same morals and values as you. And the policies a management company makes will tell you a lot about what they value. A well-run company already has good processes and efficient systems in place.
Find out what their policies and systems are so you get a good idea about how they operate on a daily basis. The more a company or manager stays on top of issues, the less likely problems will escalate into expensive hassles.
6. A Large Client Base
A property manager with no clients either has no record of success or a poor record of success. Either way, if your property manager doesn’t have references, it doesn’t mean it’s because they’re over-qualified.
Managers or management companies with large client bases mean they’re well-connected to local vendors. It also means they have a lot of experience and are highly regarded within the local community.
7. Great Customer Service
It doesn’t matter what industry you’re in, customer service should be a top priority. Property managers shouldn’t just be able to provide your tenants with consistently good customer service, but they should be able to offer you reliable and professional customer service as well.
If you notice they take too long to respond to requests or are less than professional, keep searching. Otherwise, you may end up costing you money in the long run.
You also need to make sure that the property management company is willing to serve both you and your tenants 24/7. While emergencies don’t often come up, you need to make sure the company will handle it on your behalf at any hour when it does.
8. Transparent Contracts
Before you sign any contract, always read it through carefully to make sure you fully understand the terms. You may even want your attorney to look it over to make sure it’s a good deal for both you and the property management company.
The agreement should outline the business relationship between you and the property manager. It should also list the team’s tasks and responsibilities. A typical agreement should cover the types of services provided and a list of the fees associated with those services. Typical services include:
- Maintenance
- Marketing and filling vacancies
- Resolving tenant needs and requests
- Tenant Screening
- Handling move-outs and evictions
- Daily operational duties
All additional expenses should be covered within the agreement. It should also stipulate how repairs are handled and paid for. It should also include a set expense limit so there are no surprises.
An agreement may also cover any responsibilities you as the owner may have. If you do not wish to perform certain duties, make sure they’ve been discussed and assigned to the property manager.
There should be a specific start and end date. Many property management contracts are for one year. The contract should also cover any breach of contract rules along with termination fees and timelines.
9. Insurance
Always confirm the property management company has the correct type of insurance such as:
- General liability
- Property-casualty
- Errors and omissions (E&O)
You may also be asked by your property management company to obtain insurance. Complying with this request will only benefit you in case something happens.
Conclusion
The benefits of hiring property management are endless but you have to be careful and do your research. You don’t want to hire the wrong company and end up costing yourself money. Or even worse, get stuck in a contract while they mismanage things. If the right property management company is hired, you will save yourself money and time in the end. Now that you know what to look for in a property management company, give us a call. We’ll be happy to answer any questions you may have and see if a partnership with The Kenmore Team is the right fit.