There is no denying the fact that finding a good property management company is hard. To improve your chances of hiring the right one, it’s incredibly important to have a set of questions prepared beforehand.
Asking the right questions can be the difference between hiring a competent property manager and property manager who’s going to cause more harm than good.
So, here are the best questions to ask a property manager when interviewing them.
1. How long have you been managing properties?
Needless to say, the longer the period the better. The level of their experience is the best indicator of how well they know the market. Specifically, look for a manager who’s been in the property management business for a minimum of three years.
2. Where are most of your properties located?
If the manager doesn’t manage any properties in the area where your property is located, they probably aren’t knowledgeable of the area. Continue looking.
On the other hand, if they manage other properties in the area where your property is located, it means that the manager knows a lot about the area. He or she is, therefore, a better candidate.
3. What type of properties do you manage?
Obviously, you are looking for a person who manages your type of property. If they don’t, walk away. You wouldn’t want them to experiment with your property, would you? There are differences in managing a residential property vs a commercial property.
4. Have you invested in real estate yourself?
Preferably, look for a manager who is an active real estate investor in your market.
5. How do you come up with the rent amount?
For a competent property manager, this question should be straightforward. Watch out for terms like “comparable market analysis.” As a guide, the comparable market analysis is an examination of the prices at which similar properties rent.
6. Do you belong to any professional organization?
Professional organizations are typically a sign of professionalism. An example of such organization is the National Association of Residential Property Managers. If the manager doesn’t belong to any of these organizations, walk away. It’s a red flag.
7. Can you explain the federal fair housing laws?
Passed in 1968, the federal fair housing prohibits discrimination of a tenant based on certain protected characteristics. The prohibitions specifically cover discrimination because of disability, sex, religion, national origin, race, color and familial status.
In addition, specific states may include other prohibitions. These laws are extremely important, and a competent manager shouldn’t have any issues explaining them to you.
8. Can you provide a couple of references?
A good manager will have a couple of these to point you to. Make sure that you actually contact the references. Listen to what they have to say. You can normally tell whether they were happy with the services or not.
9. Can I cancel my contract with you if I’m unhappy with your service?
Only look for managers with a flexible contract. Inescapable contracts are bad news.
10. What services do you provide?
Assuming you want full-service management, you only want to work with a manager who can handle various tasks. For example, showing the property to potential tenants, collecting rent, paying bills, negotiating leases, and handling repairs and maintenance.
11. Which method do you use to collect rent from tenants?
If the property manager is still asking renters to bring checks to the office, you are better off continuing your search. The modern manager collects rents online for two reasons. One, it makes the process extremely simple for tenants as they can automate their payment. And two, it allows you, the property owner to get paid faster.
12. What percentage of security deposit do you usually refund back to tenants at the end of their tenancy?
If very little, then it means the manager is doing a poor job when it comes to screening tenants. A thorough tenant screening process should only yield quality, responsible renters.
13. On average, what is your occupancy length?
A longer occupancy length means the manager is doing a great job at keeping renters. On the other hand, a poor occupancy length means there is something the manager isn’t doing right. Walk away.
14. How long do your vacancies often last?
Look for anything between 15 days and 30 days. Longer than 30 days means the manager likely struggles to fill a vacancy. A poor marketing strategy is likely to be the main problem.
A vacancy lasting less than 15 days may mean that their price of rent is probably too low. Either of these scenarios is bad for business.
15. What percentage of tenants renew their leases with you?
If eight out of ten tenants end up renewing their lease, it means that the manager is doing a good job. Anything below 50% is a red flag. Continue searching.
16. What percentage of owners renew their contracts with you?
This is a bit of a “gotcha” question. If the manager is retaining a good portion of property owners at the end of the contractual period, it means that he or she is offering good services.
Armed with this comprehensive list of questions, you’ll be on your way to hiring the best property manager you can find.
If you’re looking for a property management company in Denver or the surrounding areas don’t hesitate to reach out to us! We would be happy to speak with you about your property management needs.