If you are like me, you want to hire the very best property management team you can find. It can be quite difficult finding the right company to work with and can take a lot of time interviewing each property manager. It is very important to take your time and interview as many as you can until you do find the right property manager. Property management can make or break you! Your rental properties will not survive under bad management especially if you are into out of state investing like I am. It’s in your best interest to interview each PM very thoroughly.
I have compiled a list of the absolute best questions to ask a property manager when interviewing one to hire. It is a good idea to ask all these questions and see how the property manager responds to them. Any negativity or horribly answered questions can be a huge red flag for you and help you weed out the bad ones.
Here are the Top 31 Questions to ask Property management Company.
1) Is your property management team licensed?
- Make sure this one is a “yes”. You don’t want an unlicensed management company as it can come back and haunt you if there are ever any legal matters.
2) Are you insured?
- Confirm that the property manager has at least liability insurance.
3) How long have you been in business for?
- Youre looking for an experienced property manager. The more experience they have the better they should be able to handle any situation.
4) How many properties/doors do you manage? And how many employees do you have?
- This will give you a glimpse into how big this company is and based on the employee/doors ratio what kind of service you can expect to get. You don’t want one employee handling 100 doors. The level of service would be degraded. One property manager per 50 doors or under should be good.
5) What types of properties do you manage?
- You want to make sure the property manager has experience in the type of property you have whether it be Single family, duplexes, triplexes and even four-plexes.
6) What is your communication response time for owners and tenants and via what means?
- Preferably the PM will be able to be contacted via email, text, phone and an online portal. Response time should be no more than a few hours at the most.
7) How often do you communicate with me?
- Find out when you can expect to be contacted. For repairs? Questions from tenants? Status updates? Anything?!
8) What are your management fees?
- 10% of the monthly rent is average. If its more, find out why? If its less, find out why?
9) What is your fee for filling new tenants or re-leasing an existing tenant?
- Typically its 75% to 100% of monthly rent for a brand new tenant. For a simple lease extension it should cost very little to do this as it virtually requires no effort from the PM. Watch out for high costs on this.
10) Do you have any hidden fees?
- Some property manager charge fees and markups on repairs, marketing, account setup and others. Find out ALL the fees they have.
11) What percentage of expiring leases renew?
- It’s better for everyone for this number to be high especially if it’s a quality tenant. Reducing tenant turnover will greatly reduce headache and keep that cash flow coming!
12) How long is your average # of month’s occupancy per property?
- Average is about 1 year. I like 18 month leases. Locale is very dependent on the recommended answer. If you are in a hotter area with rents increasing then you don’t want to have the tenant sign for more than 1 year as you won’t be able to raise rent prices during the lease.
13) Can you provide copies/templates of your contracts? (lease, pet addendum’s, etc..)
- It’s a good idea to review these documents before hand to confirm they work well for you.
14) Can I cancel my contract with you if I’m unsatisfied?
- Some property management companies try to lock you in on a yearly basis no matter what. I stay away from these. If they do not do a good job you should be able to say YOU’RE FIRED!!
15) How do you determine market rent value?
- They should be able to provide proof that the projected rent values coincide with the market. Ask for MLS rent comps. You can even do your own research on Zillow, craigslist and rentometer to confirm the rent prices match to similar homes in the same vicinity. If the numbers don’t match, take this as a red flag.
16) How do you market/advertise your properties?
- You are looking for high visibility when marketing your rental so make sure they are up to the task.
17) What is the screening process like for qualifying tenants?
- It’s almost impossible to find a perfect tenant but there are many steps that can be taken to securing a good tenant(s). You should expect a credit check, background check, eviction report, pay verification and previous history of rent payments from the screening process.
18) Who is your average tenant?
- College kids, blue-collar workers, families, couples and young professionals. That is what you should be hearing as those typically make the best tenants. Also check if they do section 8 or low-income tenants. Don’t get caught off guard if they do but be aware and do more research. You may not want to dive into that realm as it typically means more headaches in the future.
19) What forms of payment are accepted by the tenants?
- We live in a world today where tenants love to pay online. This is a great feature to have and makes life a whole lot easier. Find out what other forms of payment they have available and which ones their typical tenants tend to go with.
20) Do you perform property inspections?
- A property manager may charge a little extra for this but it’s always a good idea for someone to at least do a drive by periodically on your property.
21) What is your eviction experience and what is the process?
- You want to make sure they know how to handle an eviction as quickly and efficient as possible and that only comes with experience. It’s a double edge sword though because if they have a high amount of evictions then they are most likely not screening the tenants properly.
22) How long does it typically take to fill a vacancy?
- This varies by locale however it’s good for you to have an expected time frame so you’re not caught off guard when it takes 5 weeks for your vacancy to fill.
23) How is the security deposit handled?
- There always needs to be a security deposit and it will either be held by the property management team or given to you. Find out. Then find out how often its refunded to the tenant.
24) How do you handle tenant delinquency? Late payments?
- You need to make sure they handle these matters professionally and legally. Don’t ever let a tenant slide from having to pay a late payment fee. This will only lead to more trouble in the future.
25) What is the cost of an average repair bill after move out? (make rent ready)
- It’s a good idea to get an estimate on how much on average you can expect to pay to make your rental rent ready again after vacancy. Don’t get caught off guard a year later when this happens.
26) What is your repair process like?
- Some property managers may ask for a repair deposit so that they can make the repairs immediately. Find out if all repairs require approval from you? It’s always best you are aware of all repairs and requests made by the tenant.
27) What is your definition of rent ready?
- You want to make sure that the PMs definition of rent ready is the same as yours. A tenant wants a good, clean house in working order and so do you. You also need to make sure all the legal requirements of the state are in place like amount of smoke detectors, etc.
28) Do you provide monthly statements?
- Monthly statements are highly desirable. They give you all the details, dates, payouts, repairs and show all activity that happens with your rental property each month.
29) If I decide to sell my property, do I have to sell it through you?
- There are a few out there that will have it in the contract that you must sell through them if you decide to do so. This may or may not be a good thing depending on the property management company.
30) Do you have any references?
- A good property manager will have at least a few solid references of existing customers they can point you to. Make sure to actually contact these references and see what they have to say. You can normally tell in the way someone sounds or communicates if they are happy or not and this something you should try to read from these people.
31) Last but not least. HOW DO I GET PAID!!!
- Find out when the check/ACH disbursement typically occurs after the tenant pays rent. You want your cash flow! Cash Flow is King!!
Isn’t this the most comprehensive set of Property management questions you have ever seen? You are now well on your way to hiring the best PM you can find. The best PMs will also have these top qualities. Good luck with your search and make sure that when you do find your golden PM, do everything you can to keep them happy as well. Its a two way relationship and if they keep you happy, you should keep them happy!
Have you had any bad experiences with a property management company? Would love to hear about it and so would the readers. We need to all learn from each other on this.