8 Questions to Ask Before Hiring a Property Manager

Do you feel like it's the right time to hire someone to manage your property? Hiring someone to manage your assets can be a daunting task, especially if you're a new landlord. However, the right manager can considerably boost the efficiency of your investment property. Maybe you have no idea what makes the best property manager, but you know your objectives. You want to make sure that you choose the best person for the job.

How can you make sure you hire the ideal property manager? While there are numerous qualified property managers in the market, it's essential to find a person whose skill set matches your asset's exact needs. Read on to learn the right questions to ask before hiring someone capable of managing your investment property.

1.  What are the Rates of Your services?

The first question that should pop up before hiring the services of a property manager is the rate charged. Now, different property managers will have varying charges. Expect different rates throughout your hiring process. Some people will offer a percentage of collected leases, while others will request a flat fee regardless of whether the unit has a tenant or not. You need to evaluate the total income your investment will generate and still give a good return on investment after paying the property manager's fees.

You need to ask yourself what the average management rate is for rental properties. The property manager's fee is usually between 4% and 9% of the asset's monthly income. Generally, it depends on the property manager and the type of property. The key here is to choose an ideal manager that will provide a reasonable rate for the services rendered.

2.  Are there hidden management fees?

Certain property managers offer low upfront management rates that seem too good to be true. Some managers add on hidden charges such as maintenance markups, tenant finder's fees, evictions, maintenance reserves, and other fees. Make sure you examine the fee structure properly to clear all expenses you may incur. The job candidate should outline the management rate structure in the contract to avoid any misunderstandings later.

3.  Can the Management Contract be canceled?

Investment property owners often find themselves locked in an indisputable management contract. Before hiring someone to manage your asset, you need to review their agreement cautiously. You need to ensure the property manager's responsibilities are indicated in the contract and you understand them. You also need to understand the manager's responsibilities and yours to ensure you're protected if the manager fails to fulfill their duties. The agreement ought to spell out if you can cancel the contract and on what basis.

4.  How do you Screen Tenants?

One of the main reasons for hiring a property manager is to increase the efficiency of your investment property. The quality of the tenants occupying your property may determine the profit you make from the investment. You require potential tenants if you desire to enjoy your investment property. Choosing tenants is one of the most important parts of renting a property. Your future property manager should follow a thorough screening procedure to prevent future disputes and headaches.

The property manager should detail down the screening process they will use to choose a prospective tenant. Does the manager confirm the applicant's employment history? What documents are the applicants required to submit? Does the manager look into the tenant's criminal background? Is the manager aware of the tenant-landlord laws like the Fair Housing Act? An ideal property manager should conduct a proper screening process in your absence.

5.  How is Rent Collection Handled?

Tenants are very crucial in attaining a return on investment for your property. You want to look for an ideal manager that knows how to handle rent collection diligently. Does your property manager require occupants to drop cheques at their office? If they do, it's good to keep on searching for the right manager. Dropping cheques off at the manager's office might have been the best rent collection method in the past. However, times have changed, and there are perks of modern technology to smoothen the running of businesses.

You want a property manager who will utilize online rental payment services to lessen occupants' chances of missing rent payments. Online rent payment platforms are more appropriate for the tenants and speed up the rate at which you receive your money.

6.  Are you a Licensed Property Manager?

In many states, property managers require a license to perform real estate activities such as managing investment properties. A licensed manager is cleared of violations like extortion, theft, and forgery. A certified property manager has undergone real estate training and has all the knowledge to turn your investment into a successful one. Before hiring a manager, ensure they are licensed by the relevant authorities to avoid being a victim of extortion and theft, leading to unexpected loss. Ask for a property management license to hire the right person for the job.

7.  Do you have any experience in Property Management?

Property management isn't a sector where you can use bootstraps to pull yourself up. Investment property management requires expertise, and hiring an experienced person can relieve much of the struggles of starting as a landlord. It would be best to ask the prospective property managers how long they have had experience in the industry. How do they handle challenging situations? Have they dealt with utility, maintenance issues, and renters' disputes? Make sure the ideal manager has proof of successful years of skill.

8.  How do you Submit Reports?

A property manager has to prepare annual and monthly financial reports for the landlord. A good manager will go above and beyond to make the statements easy to read and understand. The report should contain detailed information regarding every activity, such as repairs conducted and rent collected on the managed property. Before signing a contract with chosen prospective managers, ensure you ask for a sample report to verify that their manner of reporting is appropriate.

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