Educational Consumer Tips
Author: Better Business Bureau
If you have chosen to rent out your property but are unable or uninterested in being an active landlord, you’ll want to hire a property manager to take on the responsibilities. Property managers will handle the advertising of the rental, interviewing and screening tenants, collecting rent, checking the property, and doing routine maintenance. Use the following tips as a guide when searching for a property manager.
Tips for Hiring a Property Manager:
Get Referrals. Ask your realtor to suggest managers in the area where you are renting out your property. Depending on your preference and property you may feel more comfortable with a small, local business or a large property management business. Look for a property manager that is an expert at managing the type of property you are renting out. Be sure to check bbb.org to make sure the property management businesses you are considering have good reviews and few complaints.
Interview Potential Managers. You’ll want to meet with property managers in person to find out if you feel comfortable with them and make sure they address all your questions and concerns. Be sure to ask how many properties the candidates manage and if they own any of the properties. When the property manager owns their own property you will be competing with the manager’s property for tenants. If there is a vacancy at both properties it will be difficult to know if the manager is prioritizing your property. Find out how often they check on their properties and how maintenance will be handled. Avoid managers that constantly cut you off and dismiss your questions during the interview.
Check Out Their Work. Check out the property manager’s current rental ads. Look for a manager whose ads are professional and advertised in numerous locations. If possible, visit a few of the properties they manage and make sure they are well maintained. Ask tenants if complaints and repairs are addressed in a timely manner. Find out if tenants are satisfied with how the property is maintained.
Check Certification. Research the requirements to work as a property manager in your state. In most states it’s necessary for property managers to have a real estate broker’s license or a property management license. Check with your state’s Real Estate Commission to make sure the manager’s license is valid and up-to-date. Ask if the property manager is certified by a professional trade organization such as, the Institute of Real Estate Management (IREM) or the National Association of Residential Property Managers (NARPM). Those who are certified by IREM or NARPM have completed difficult training programs and participate in continuing education classes.
Discuss Price. Property managers usually charge between 5% and 10% for their managing services. The manager should charge their fee based on the rent that is collected instead of the rent that is due. This will prevent you from paying the property manager for tenants who have not paid their rent. Ask the manager what services are included in the fee. Find out if you will be charged an additional fee for advertising, evictions, or visiting the property for maintenance.
Review the Management Agreement. The agreement should define the responsibilities of both the property owner and the property manager. Make sure the agreement also includes: the services being provided, extra fees, compliance with the fair housing laws, and the cancellation policy. Any oral promises made during the interview should be in writing, otherwise they will not be enforceable later. Be sure to thoroughly read the agreement before signing.
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