You’ve gone through the hard work of finding and buying a property, and now you want some tenants (and a break!). This is where your property manager comes in, it’s now their job to keep a hand on the wheel so it’s all heading in the right direction. But what should you look for when selecting a property manager? What kind of questions should you be asking? Here are five things to look for when you’re scouting for a new property manager.
1. Communication
This should be at the top of the list for any professional. Does your property manager answer your questions? Quickly? Thoroughly? A property manager is there to do just that, manage your property, so you need to know that if you (or your tenant) have a problem, they will be there to communicate efficiently and accurately between both parties.
2. Experience
Everyone has to start somewhere, but no one wants an inexperienced property manager handling their investment. The number of years that the agency has been in operation is also a factor here. A less-experienced property manager in a business that has decades of rental experience is far less of a gamble than a new manager in a new firm. Also, check out those numbers and make sure that an agency’s “fifty years of combined experience” isn’t based on one person who has been there for 45 years!
Asking for references is also a perfectly acceptable thing to ask for. Remember, this is a business relationship, and just like selecting a property for investment, you want to make sure you’re going with the best option. If an agency won’t give you any referees to talk to, keep looking. Every agency should be able to give you at least one or two references to contact. Don’t be afraid to ask those contacts who they’ve dealt with at the agency. If all your referees are dealing with Amy (who’s wonderful) and Mary (who recently left), but you have Bob, then how relevant is the information? Stay sharp out there!
3. Tenant screening and eviction experience
What are your property manager’s screening processes? Ideally they should be doing income and credit checks, as well as checking prospective tenants’ eviction and payment history with their previous landlords. A background and reference check are also an extra layer of security that will increase your peace of mind.
Your property managers should also have experience with evicting tenants. Not too much, because obviously that shows a problem with their screening process, but even with the best practices, sometimes bad things happen. Compare the number of evictions with the number of properties they manage, and then ask them how long an eviction usually takes, and how much it costs. Property investment is all about managing contingencies, so it’s best to know the hard numbers upfront so you can make sure you have that money tucked to one side in case the worst does happen.
4. Fee structure
You’ve just spent all that time looking at property — you know that more expensive is not always better. Around 10% of the weekly rent amount should go to the property manager for fees, and signing new tenants should be around 100% of the rent amount. If there are any strange fees for administrative tasks (like issuing a new lease), scrutinise them. Administrative tasks aren’t a boutique service, they’re part of the work you’re paying for with your 10%, so make sure you read your contract carefully, and query anything that looks out of place.
5. Digital business practices
Do people use cheques for anything other than sending in the mail and reimbursing expenses these days? Most property managers these days are requiring tenants to pay via direct debit (one way or the other), and usually with automatic payments. Ask your property manager how they collect the rent, and if they say they’re still accepting cheques, that might be a tiny red flag in the distance.
Do they have a web interface you can log into? What about your tenants? What kind of information can you access online without needing to pick up the phone? Also, if you file a question or a request in their system, how long does it take for them to respond? Bells and whistles don’t mean much if no one’s listening.
Remember that while you should have a good interpersonal relationship with your property manager, first and foremost this is a business relationship, and as such there are standards that should be met. If you wanted to chase up tenants and rent, you wouldn’t be hiring a property manager, so you need to make sure that the person and business that you’re trusting your property to is up to the job. Ask a lot of questions, pay attention to the tone and timing of the answers, and follow your gut. Finding the right property manager for you will save you a lot of hassle in the long run.
