If you are interested in investing your money, there are few choices better than investing in real estate. This is because real estate is one of the most profitable investment options out there.
However, let's say you own rental property in Georgia, but you live in Colorado. How will you keep an eye on your investment? Or, even if you live nearby, do you really want the stress of dealing with tenants on a daily basis?
To make managing your investment in real estate as stress-free as possible, you need a property management company. But not just any property management company. You need one who will have your best interest at heart as they keep your property maintained and your tenants happy.
In order to find the right property manager, you need to know what questions to ask before hiring. Listed below are 7 questions that will help you learn everything you need to know from a potential rental management service.
7 Questions To Ask Property Management Companies Prior To Hiring Them
1. What Services Do You Offer?
The primary function of a rental property management company is to market and lease your property, then manage every aspect of the renters' stay once it's occupied.
Get an idea of what services your management company offers on top of the basics. What kind of maintenance team do they have on staff? How often will someone be checking on the property? What qualifications do they require from tenants?
2. What Are Your Management Fees?
Like any professional service, property management isn't free. Now, you don't want to overpay, but it is also important to remember that sometimes you get what you pay for. Picking a property management service because they offer the lowest management fee might not be in your best interest either.
It's a good idea to interview multiple options. That way, you can compare prices and services and choose the best one for you.
Some companies offer a flat rate, others have a sliding scale based on the rental price. You might also have to pay an introductory fee. Be sure that you understand what you'll be paying monthly for the base service, as well as any miscellaneous fees they might charge.
3. How Many Rental Properties Do You Manage?
Next, find out how many properties the company manages. This might not seem relevant, but if a company with three employees manages 500 properties, your property is unlikely to receive the attention it requires.
On the flip side, a company with only a few properties could also be a bad sign. This might mean that they don't have a lot of experience or that they lost a large portion of their business due to bad service.
Although online reviews shouldn't be the sole deciding factor, it can be helpful to take a look at what other owners, as well as tenants, are saying about the service they received.
4. How Do You Determine the Rent for Each?
Pricing rental property is tricky. Too low, and you lose out on profits; too high, and your property will stay vacant longer than it should. A quality property management company will be able to hit the sweet spot in the middle, offering you maximum profits while keeping your home occupied.
Ask them what factors they use to determine the rental price for each of their properties. And, more specifically, how they will determine the price for yours. Any special features, such as a gourmet kitchen or a large backyard, should be factored into the decision.
5. How Long Does a Typical Home Sit Vacant?
Do get a good idea of how successful they are at pricing their properties, as well as their marketing abilities, ask how long a typical property sits vacant between tenants.
Remember, your income from your rental property comes from rent paid by tenants. If your rental property stays vacant for three months between tenants, that's three months worth of profits you're missing out on. An experienced property manager should be able to rent your property two to four weeks after the last tenants vacated. Take a look at their website. Browse the current properties they have listed to see what kind of descriptions they write for their homes. You want a management company that captures the value of your home and conveys that value to potential renters.
6. Do You Offer Property Inspections?
This question is very important. A quality property management company will do periodic inspections and communicate the results to you. As much as we hope that renters will care for their rental home as if it was their own, many do not.
There's always a risk of damage or neglect from tenants, but inspections will help to keep these at a minimum.
Ask potential management services if they offer property inspections - if they don't, they're not the company for you. If they do, find out how often they're completed and how quickly you can expect to hear the results.
7. What Are Your Requirements for Renters?
Last but not least, ask what kind of requirements they look for in potential renters. Your property management company should do thorough background and credit checks, and meet with or speak to prospective tenants before signing any leases.
Take care to ensure that your property manager requires proof of income before leasing a property. These requirements vary by company, but a common standard is that the tenant makes three times the amount of rent per month.
Ask These Questions to Find the Best Property Management Company
Searching for the perfect property management company can be stressful. The last thing you want to do is leave your investment in the wrong hands.
By asking these questions before making your decision, you're much more likely to find the ideal property manager. One you can trust to care for your property as if it were their own.
In need of more real estate and finance advice? Take a look at the Real Estate section of our blog to learn more about property management, rentals, timeshares, being a landlord, and much more!
