Taking care of your own home can be hard enough, and maintaining a rental property that someone else lives in and you do not see every day is even more challenging, and nearly impossible if you live out-of-state. If you don’t mind maintenance projects and want to take a hands-on approach, it might be worth the effort to act as your own property manager.
But for many people, managing a property means a lot of extra time and effort that’s better delegated to a professional or management company. When looking for help with your investment property, it’s important to know what questions to ask your potential property manager and where to find them.
Reasons to Hire a Property Manager
Owning an investment property can be an excellent way to increase your monthly income. However, there is some work involved in the care and upkeep of any property. This might include lawn maintenance, building repairs, plumbing, and mechanical issues.
There are several reasons why a property manager might be a better strategy than taking care of the property on your own:
- The property is not local – If you can’t physically check on the property or make repairs, it makes more sense to hire a local property manager.
- It makes better fiscal sense – A professional property manager can often handle rental issues and keep your property occupied with better regularity. This often means that investing in a property manager will allow you to earn more from the property.
- You want a fully passive income – Your investment property may be just that – an investment. If you’d prefer to simply earn the income without taking on extra responsibilities, a full-time property manager is the best route.
- You want professional help – If you’re new to owning property for rent, there are a lot of different facets to consider. You may want to hire a property manager so that you have a professional’s expertise to help your venture run smoothly.
Researching Prospective Property Managers
If you’ve decided that you do want to hire a property manager to take care of your building(s), the first step is to research local companies and professionals. There are several research methods you can use.
You might start by discussing your needs with local friends and colleagues who also use property managers. You can also conduct a search through local business associations.
Build a list of the most reputable property management candidates.
Once you have a set list, you should contact each person or company to discuss your position and need. This will help you narrow down your list and give you a chance to request referrals. A reputable professional should be able to provide references. These may include:
- A list of references – There should be primarily made up of professional colleagues and past employers/building owners.
- Licensing and standing – You should be able to check a company’s standing in the community and with the BBB.
Ask the Right Questions
If you’re using a management company, you’ll want to develop a list of questions to ask during your interview with the company. Depending on the size of the company, you may want to speak with the person who will be in charge of your building itself or a client manager who can answer all of your questions on behalf of the company.
This list of questions is not exhaustive but it should give you a good framework to start. You can also add your own questions, specific to your needs and property.
Questions to ask property management company:
- Is the company licensed?
- How long have you been in business?
- What type of experience does your personnel have?
- How many properties do you manage?
- Ask for the background of the manager for your property and/or information on managers who will deal directly with your building and tenants.
- Do they manage too few and seem inexperienced?
- What types of properties do you manage? Look for companies with experience in the type of building you own.
- How would you handle vacancies?
You may decide not to use a company and instead opt for a property manager who works for you directly or via an independent contract. You can use a variation of the same questions you would ask a company, but more time should be spent getting to know the individual applicant.
Questions to Ask a Potential Property Manager:
- How would you handle a tenant that does not pay rent?
- Is this your full-time job?
- Do you have any relevant licenses/education?
- What are the steps to properly evict a tenant?
- Do you know the safety codes needed for the building?
- What are the rules for collecting security deposits?
Set Your Expectations and Develop a Strategy
Prior to hiring, it’s important to lay out the type of business relationship you expect from your property manager. This might include the types of communications you need and an expectation of how available they are for your buildings.
In some cases, it might be perfectly acceptable for a property manager to only contact the owner with monthly reports or updates. In other cases, the building owner is far more involved in the day to day running of the building.
These expectations all depend on the type of relationship that you lay out in the beginning. In cases where your property manager is a single individual who also manages other properties, they may have a set time frame to respond, due to other responsibilities.
Considering a Fast Sale for Your Rental Property?
An investment property can bring in extra income, but it doesn’t come without a price. For some, the time, expense, and effort needed to run a rental property is just not worth it.
If you’ve decided that the additional responsibility isn’t worth the monthly income or if your current property has you in the red, HomeGo can help. Contact us today to discuss the quick and simple process of selling your property.