After much deliberation and careful study, you’ve finally taken the plunge and purchased your first rental property. Perhaps it came with tenants already onboard and paying monthly rent, or maybe you need to find and interview potential tenants. The property likely has a little maintenance or upkeep that needs to be done on it. No matter what the situation is, it’s tough to rent out a property without devoting much of your time to acting as a landlord. That is, unless you hire a property manager.
Vetting property managers can be just as stressful as vetting potential tenants — especially to a first-time rental property investor. What qualifications should you look for? What questions should you ask? This quick guide will help point you in the right direction to help you find the right property manager to manage your investment.
Did you purchase your rental property with the help of a real estate agent? Ask them who they’d suggest as a management company. Also ask any friends or colleagues you know who have investment properties. If you have any specific companies in mind, ask about them and see if you can get any feedback. Note any names that keep coming up and whether those names are accompanied by a smile and a thumbs-up or a grimace and a head-shake.
If the property managers don’t deal well with you, then imagine how they’ll treat your tenants! First impressions count for a lot, so if you get a bad feeling when vetting property managers in person or over the phone, move on. One of the keys to attracting top-notch tenants is to be a fantastic landlord. Since the management company will be dealing with tenants on your behalf, you need them to be courteous, professional, and efficient. Anything less will spell trouble in the long run.
One of the most important things to investigate is if your potential management company specializes in any specific type of property or area. If all of their properties are single-family homes on the north end of town, for example, and your rental is a small condo in the heart of downtown, they may not have the right resources to find the appropriate tenant for you.
Find out all of the details of how they handle business. This includes things such as how and where they advertise rentals and how they screen prospective tenants. It’s also important to know how many vacancies they currently have, as well as how long it typically takes to fill a vacancy. Also find out how they handle problem tenants and deal with evictions.
Also take a look at their management contract to see all it entails. Who will be your point of contact and when will they be available? What will their services include and how much are the fees? Are there any extra charges for specific services? Do they handle maintenance and repairs in-house or outsource it (and if it’s the latter, to who)?
Especially if you’re new to real estate investing, don’t hire the first property management company you interview. To get a better feel for different styles of rental management, as well as to get comparisons on different services and rates, talk to a few different companies before you decide on one. When you choose, make sure everything you discussed during the interview is included in the management contract. When you begin working with a quality property management company, you’ll find that it makes your real estate investment life much easier. There’s a reason that rental income is called “passive” income, and with the right management company, you’ll never have to be actively involved.