Interviewing to find a property manager can be a great option for investors who are looking to offset the stress and liability associated with self-managing their rental properties. While investors who are seeking passive income are smart to hire a property manager, not every property manager or management team is equal.
Finding a property management company that fits your needs requires doing your research and treating potential options with the same due diligence you would if you were hiring an employee. After all, your property manager will be working with and for you to ensure your rental property is well-cared for and has the best possible ROI; it just makes sense to put forth the effort to interview potential candidates to find the best fit.
Understand What You Need from a Property Management Company:
Before your can interview a property manager, you’ll need to find the available property management company options in your area. Your search begins with you understanding what you need from a property manager before you can choose a potential property management company. When evaluating who to follow up with and interview, there are a few things you can do to narrow your search.
Begin finding potential managers to interview by:
- If beginning via internet search: Start searching specifically for what you need.
- If you are preforming a google search to find management companies near you, consider adding any relevant specifics to your search phrase. For example: ‘commercial property management’ vs ‘apartment management companies’
- From this point, sort your options by customer rankings. Be sure to read reviews; this will help you understand how other owners and tenants feel about the service provided. Keep in mind that renters may have skewed expectations, so pay attention to how the company responds to negative reviews.
- Consider skipping the search engines or using those searches in conjunction with looking at professional directories.
- If begin your search through word of mouth: Do you have a real estate agent or broker that you already trust? Many property managers are brokers or operate under a broker, check with the real estate agency you already have a relationship with to see if they offer property management as part of their services. This can mean you’d have a one-stop-shop to grow and manage your portfolio as you invest in more rental properties. Alternatively, reach out to your your local real estate, landlord, or property management associations for referrals.
Learn more: How to Choose a Property Management Company
What to Ask When interviewing Property Managers for Your Rentals
Doing your basic research is key before you begin the interview process. You should already know the basics about the companies, if possible. This can save you and the company time. However, there are a few questions you need to ask if you don’t already know the answer.
Real estate investor and expert Brandon Turner, past host of The BiggerPockets Real Estate Podcast, suggests these key questions to followers on Twitter (now known as X).
Here are 10 questions Turner suggests investors ask:
1. What are your management fees?
2. How many properties do you manage?
3. How long have you been a property manager?
4. How do you screen tenants?
5. How do you market vacant properties?
6. Do you accept people with an eviction on their record?
7. What do you do if a tenant doesn’t pay rent?
8. How long do tenants stay and how long are units vacant for?
9. Am I locked into a management contract with you and if so, how does that work?
10. How many evictions do you have each month?
In addition to these helpful questions, there are some in-depth answers you may desire. While these questions can be important to your ROI regardless of how many properties you own, these are especially important if you have a larger portfolio of rental properties or if you plan to grow your portfolio over time.
Interview Topics When Hiring a Property Manager
Ask About The Company Background
You should know how long the company has been in business, the number of employees on staff, as well as their qualifications. Discuss any relevant certifications or licenses, such as a real estate license or property management certification. Find out if the property manager can provide references from past or current owners.
Evaluate Services Offered:
Most owners know to look at service fees, afterall that fee will greatly affect your bottom line. However, the fee percentage isn’t the only thing you want to evaluate. Ask about the scope of services itself (and if any have additional fees).
Consider asking questions such as:
- What services are included in your property management agreement?
- Do you offer tenant placement services, and if so, what is your process for screening tenants?
- How do you handle maintenance and repairs? Do you have in-house staff or do you subcontract?
- If they use vendors or contractors ask how the property manager conducts vendor screening to choose vendors.
Ask Financial Questions:
Financial management is key, and a great property manager will help ensure that you see the best ROI possible while correctly maintaining and caring for your property and respective tenants. Clear reporting is essential for you to know how your investment is preforming, and many states require property managers to offer specific financial statements to owners.
Consider asking:
- What is your process for collecting rent and handling late payments?
- How often will I receive financial statements and reports?
- Can you provide examples of the types of reports you generate for property owners?
- Do you offer an online platform for me to view pertinent information when needed?
Ask What They Expect From Owners:
Hiring a property manager requires mutual understanding and trust, find out what the manager’s expectations are for owner clients before you sit down with them to sign a contract. Some terms are requirements because they make the business run more smoothly, some will be due to legal requirements from landlord-tenant law in your area. Property managers may require that they hold the security deposit funds not you as the owner, some may require a reserve fund so they can make repairs when deemed necessary.
Consider asking:
- What are your requirements from your owner-clients?
- In your opinion, what makes for a good owner-manager relationship? What makes for a bad one?
Final Thoughts:
The beauty of forgoing self-management is that you don’t face the burden and liability of being a landlord. However, every savvy real estate investor should understand as much as they can about the rental industry. This can help you know if your property manger is doing a great job, or if it may be time to cut ties. It can also ensure that you are not causing issues by unintentionally breaking any rental laws. Regardless of who you hire and how experienced they may be; be sure you are still staying up-to-date on relevant industry standards and information so you can work in conjunction with your manager to implement any new standards or ideas.