Most relationships for property management last for years, so it’s good to ask any property manager you may hire an array of important questions. In addition to addressing things specifically important that you’ve already identified, I suggest that you also consider the following:
How many units does a given manager oversee? A manager with support staff to do things like answer phones, show properties, and bookkeeping could reasonably manage about 100 or so units. A small company where one person does nearly everything, with occasional help from an assistant could reasonably handle about 55 units without compromising quality of service.
How many years’ experience does the manager assigned to your property have under his or her belt? How old is the company and is it fully legal, licensed and insured? Does the management company use independent contractors or do they have their own subsidiaries that do maintenance? I cannot state strongly enough that a company that uses its own sub companies for maintenance is a VERY BAD arrangement for a landlord.
Does the company help you keep track of things like making sure your roof is okay before there’s an issue? Do they walk the grounds periodically and if so, how often and what do they look for? Do they customize things for you and use your preferred vendors upon request? Do they mark up any of the invoices that you pay and keep a cut? If so, what amount? Are the mark-ups stated clearly on the statements?
Does the management company require that you do anything specific regarding maintenance, such as annual furnace tune ups or biannual gutter cleaning? Does the company require you to have any particulars in place, such as a sprinkler system for lawns, blinds on windows, or a fire extinguisher? Will they ask in advance before spending your money? Is the manager willing to keep a list of any house ideosyncracies, such as making sure wool carpet is cleaned properly or making sure to tell all new renters any unique operating instructions for any specialty appurtenances?
What is the screening process for potential renters? Does the company call landlord references of potential tenants or farm it out to a service? Do they ever approve applications without having reached references? How does the company treat the renters it oversees? How do tenants report maintenance issues? By email, phone call, a portal? How soon can your tenant expect to hear from the management company once they’ve made a maintenance or any other request? How easy is it for a tenant to reach a live human being at the management company?
Does the management company ever charge your renters for things beyond their monthly rent obligation? If so, for what and what is that process? It can be very illuminating to ask to see a review copy of what a given manager’s statements looks like. Reviewing a management company’s lease, which they will be signing as your Agent for Owner, can also be informative. Regarding fines and extra fees for renters, how often does the manager impose them, what for and for how much money? Do they give a warning first? Who keeps the fees and fines money, you, the management company or do they split this income with you?
All kinds of unexpected policies can be part of a company’s culture. Most landlords don’t think about most of this stuff until there’s a problem. Perhaps most importantly, it’s important to ask yourself what kind of landlord you are or want to be. Do you care only about bottom line, no matter what goes on between your manager and the renters? I caution anyone with that attitude. Our town just got news that a very large Boulder rental property management company was caught cheating renters for years. If they were to have more landlord clients who genuinely care about their renters, who are at least somewhat engaged in the process, that company may not have gotten away with so much malfeasance for so long.
If your management company treats your renters with class and dignity, you will benefit. Happy renters make longer-term renters.
