Did you know that the property management industry netted a revenue of $101 billion in 2021?
Needless to say, buyers’ markets around the nation are being flooded by investors. They are focusing on homes in areas with strong economic growth.
That’s why you’ll need to engage the best property managers. Ones that would not only collect rent and other expenses on your behalf but also handle daily upkeep and react to your tenants’ requirements.
If you hire a thief, you run the risk of losing the security deposit, your rent, and perhaps your appliances. When searching for a property manager, take these steps to ensure that you get the correct person for the job. Keep on reading for our full breakdown on how to pick the perfect property management firm for your needs.
The Basics of Finding the Best Property Managers: Seek Out the Experts
Property management is a thorny business. An investment property manager must be aware of all applicable federal, state, and local laws. In addition, you’ll want someone who has a track record of successfully managing a wide range of issues related to renting and owning real estate.
Look for a property management firm that has a lot of expertise with your sort of investment. A company specializing in commercial buildings may not be able to appropriately manage residential homes, for example,
Finally, be clear of real estate brokers that masquerade as property managers in order to make additional money. Your investment will be in jeopardy if they don’t have the required training or are not up to speed on applicable laws and standards.
What to inquire about:
- How long have you been a property manager?
- Currently, how many rental properties do you manage?
These are some of the basic questions to ask. You can add many other tailored questions to the list, depending on your state or area of interest.
Verify Professional Certifications and Licenses
A real estate license may be all that is required to manage properties in certain places, while in other states, no license is required at all. Professional property managers and management organizations should have the right licenses and certifications to back up their technical skills.
You’ll want to ask about the following.
- What certifications does the company have?
- Do you have a broker’s license?
- What additional training and certifications have you received?
Make sure that the real estate broker’s license of the property manager you’re considering is still valid by contacting your state’s real estate commission. It’s always a benefit to have additional professional affiliations and credentials.
Check References and Reviews
Prior to scheduling an interview with a property management firm, check its Yelp and Google ratings. And, take some time to read the comments on the company’s Facebook page.
Keep in mind that some reviews (say, an evicted renter) may have an ax to grind that has nothing to do with the quality of the company’s work on these sites. But review sites might be an excellent starting point for evaluating several providers.
The Better Business Bureau and Chamber of Commerce are other helpful places to look for complaints or favorable feedback. The property management company’s references might be useful in determining whether you’ll have a good working relationship.
Make sure to inquire about existing client and tenant references. You can do so when interviewing an investment property manager. Both groups should be contacted and asked about their experiences.
How quickly does the property management return calls and e-mails? In terms of maintenance and hiring, are they proactive? Their costs should be easy to understand and clearly stated. Is the payment made on time?
On the side of the landlord: Is the home in good condition? Is their request for repair handled quickly? Do they intend to renew their contract? Tenants who are happy are more likely to stay in the property, which means fewer vacancies and a steady stream of rent payments.
Carefully Examine the Property Management Agreement
The property management contract outlines the business relationship between you and the property manager, as well as the management team’s duties and responsibilities.
It is critical that you read the contract carefully and make any necessary modifications before signing it. Before you sign anything, be sure you understand all of the terms and conditions.
Of course, when it comes to residential real estate vs. commercial real estate, you’ll want to click for more here to get an expert opinion. For now, property management contracts often include the following provisions.
Fees and Charges for the Services
Tenant demands and requests, upkeep, marketing and filling vacancies for vacant homes, collecting rents, managing evictions, as well as all other daily operating activities are often handled by property managers.
There should be no hidden fees or processes for authorizing new costs in order to prevent any billing shocks down the road. Don’t be afraid to ask for a fixed limit on the amount that may be spent on repairs in the contract.
Owner Responsibilities and Contract Duration
The agreement may also specify your obligations in addition to those of the management.
If there are any jobs you don’t want to complete, discuss them with your property manager and assign them to them. Also, there should be a start and end date for the agreement’s term. They’re usually signed for a year at a time.
It’s also critical to include provisions for breach of contract and termination costs and deadlines in the contract.
Verify That They Are Covered by the Proper Insurance
Aside from ensuring that the managers we recommend are properly insured, we also make sure that they have suitable general liability, property and casualty, and E&O coverages in place.
Your property management agreement may also require that you have enough insurance, which is a benefit to you as well. If you have any questions concerning insurance coverage, don’t hesitate to approach your property management.
The Right Property Management Firm and Managers: Simplified
If you’re new to the wide world of real estate investment, it can be very nerve-wracking to pick the right firm or manager to take care of your property in your stead.
Hopefully, our guide has shed some light on how to select the best property managers on the market. And, if you liked reading our article, then you’ll want to check out our other tips and tricks in our real estate section.