Yes, anyone can become a property owner. However, property management isn’t for every Tom, Dick, and Harry. Property management is a skill as much as it’s an art.
So, are you a property owner looking to hire a property manager? If so, this blog is for you.
Property management involves a great deal of customer service and skills. As such, for you to get a good ROI from your investment, you need to hire a manager who possesses exemplary customer service skills, among other things.
For instance, you need to hire one that is pleasant to deal with, has good communication and organization skills, is passionate about the business, and stays up to date with industry news.
You also want to hire one that properly understands the ins and outs of the rental industry. With that in mind, here are some of the few questions you need to ask your potential property manager.
1. How many properties do you have in your current portfolio?
Your goal is to find a property manager with a number that is “just right.” Why? Because hiring a company with a small portfolio may mean two things. That is, either they are newbies, or they have lost clients due to poor services.
By the same token, you don’t want to hire a company that has a huge portfolio of properties under them. This is simply because you risk getting lost in the shuffle.
So, what is the Goldilocks level of “just right?” Well, look for a company that has a minimum of 200 and a maximum of 600 rental properties under their portfolio.
2. Which services do you provide?
Look for a company that provides a complete package. That is, one that can help you do everything from property marketing to screening potential tenants to rent collection to property repairs and maintenance.
In addition, make sure that the property management company is also able to offer other crucial services such as property inspections, bill payments, tax management, and tenant eviction.
3. How many years have you been managing rentals in my area?
Here, you are looking for experience. And even better, you’re looking to see whether the property manager in question has experience managing rentals in your local area.
To be safe, hire a property manager that has more than 2 years of experience under their belt.
4. How do you carry out property marketing?
How your property is marketed can determine how quickly you’re able to find a tenant. As such, hiring the wrong person for the job can have devastating effects on your investment’s profitability.
So, if the property manager is still placing “For Rent” signs at the front yard and hoping a tenant shows up, steer clear. While there is nothing wrong with using those signs, you want a property manager that uses a variety of strategies to expose your property in front of the right audience.
5. How regularly do you inspect clients’ properties?
Buying a rental investment is a huge financial undertaking, no doubt. As such, you want to hire a manager that can help protect your property’s value.
Broadly speaking, most property managers inspect clients’ properties four times per lease term. That is, when a tenant first moves in, when the seasons change, when driving by, and when they finally move out.
6. How effective are you at collecting rent?
Some tenants can be a pain in the neck to deal with when it comes to rent collection. That’s why you need to hire someone that experienced enough to handle all matters that are related to rent collection.
You also want to hire a property manager that provides simple and convenient rent payment solutions. The last thing you want is to hire a manager that still requires tenants to drop their checks at their office.
7. How much do you charge for your services?
Just like any other service, property management services differ from one company to the other. That said, pricing for property management services usually falls under two categories: flat rate or percentage of collected rent.
With a flat rate, it means that you’ll pay the property manager regardless of whether the property is occupied or not. On the other hand, with a percentage of the collected rent, it means that the property manager will get paid a certain percentage (usually between 4- and 10%) of the monthly rental revenue.
8. Can I cancel the management contract?
This is where you need to pay the most attention. Your goal should be to find a contract that has flexible terms. The last thing you want is to tie yourself down with an inescapable contract. So, make sure you understand everything before signing on the dotted lines.
In addition, make sure that the property management company is also able to offer other crucial services such as property inspections, bill payments, tax management, and tenant eviction.
There you have it. 8 questions to ask a property manager when considering hiring them. This will help set you up for success by hiring an effective, reliable, and professional Houston property manager.
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