More than 100 million people rent a home in the United States.
With so many Americans looking for rental properties, it can be difficult to advertise and try to find a trustworthy tenant for your property. This is where property management companies come in.
These companies offer a wide range of property management services to help homeowners create a passive income out of their second property. These services include finding tenants, collecting rent, and even doing essential maintenance on your behalf. This makes investing in real estate so much easier as you won’t need to worry about any of the daily hassles.
Are you looking for a trusted property management company to help you rent out your home? You’re in the right place. Here are a few questions you should ask before hiring a property manager for your property.
1. How Does Property Management Work?
Property management is designed to make renting property easier for homeowners. Whether you have a second property or condo that you want to rent out, working with a property management company can help make the process easier.
Not all property management companies are the same. This is why you should always ask how the company operates. In most cases, property management companies will offer you a wide range of services. This includes advertising your property, drafting legal documents, screening tenants, and even collecting rent on your behalf.
If the property management company collects rent on your behalf, they will keep a full account of all the funds and transfer it to you as soon as possible. Keeping an accurate record of the income is important for regulatory and tax purposes. This way, the entire process is done for you so that you don’t have to worry about it throughout the year.
2. What Property Management Services Do You Offer?
As mentioned above, not all property management companies are the same. This is why you should ask each company what services they offer. When choosing a property management company, it’s important to choose the right company that can do everything you need.
Having everything done under one roof can help you keep things organized and even save you money in the long run. This is because you won’t need to pay one company for advertising, another for legal documents, and a third for collecting rent for you.
The best property management companies offer everything you need to be a successful real estate investor. This includes finding a tenant, screening tenants, moving them in, doing essential maintenance, and collecting rent on your behalf.
When deciding on a property company, never settle for the first one you find. Do your own research and compare the different companies you find. You can even set up meetings with various companies to get a clear understanding of how they can help you.
3. How Do You Find Tenants?
One of the most important services offered is finding tenants on your behalf. This is because without the right tenant, your property won’t generate any income for you. While finding a tenant on your own may be difficult, property management companies have built wide networks in the real estate industry that enable them to find trustworthy and long-term tenants for you.
Finding long-term tenants is ideal as high tenant turnover means you make less money every year. Even if your property is left vacant for a few weeks, you are losing that income.
When seeking tenant services, find out what the property company does to find tenants. This could be by marketing your property online or using classified sites like Zillow or their own website. This can give you a clear indication of how the property company operates.
4. Do You Screen Tenants?
Finding the right tenants can make renting your home a dream. This is why property management companies that offer tenant screening services are so valuable. While screening can be difficult to do on your own, property management companies can do this in a fraction of the time.
Property managers will collect the entire rental application from the prospective tenant along with all the supporting documents. They will then verify the information given to make sure that the tenant is perfect for your home.
These screenings are mainly around affordability to make sure that they can afford the rental price. This can include verifying employment details and salary information. Outsourcing this to a property company is ideal as you’re dealing with sensitive information that some homeowners don’t feel comfortable discussing.
5. Do You Offer Move-In Services?
Move-in services can be incredibly helpful. These services include getting your rental agreement signed by the tenant and collecting the move-in deposit on your behalf. If there are any instructions or advice tenants need to get used to the home, this is done when they move in.
While you may think this is a quick process, it can take some time. Most property companies also do a check-in inspection to make sure that the entire home is in a good condition when tenants first move in. This is important as it will help you determine if any damage was done to the property by the tenant while they were there.
In most cases, a resident handbook is handed over. This is a brief document that outlines important information tenants may need. This can include the contact details for services nearby along with essential instructions for various appliances and utilities around the home.
6. Do You Collect Rent From the Tenant?
Collecting rent is the most important but also the most time-consuming part of renting out a property. If you think it’s going to be a challenge to collect rent from your property, think again. Property management companies will collect your rent for you and send it directly to your bank account immediately.
While this is a great service, not all property management companies offer this service. This is why it’s important to make sure that the property management company you choose will collect rent on your behalf and keep an accurate record of it.
Keeping an accurate record is important for taxes and other declarations that you may need to make. Having a property company do this on your behalf can help you save tons of time and make your life much easier. All you have to do is sit back and let the rent payment reflect in your bank account.
7. What Are Your Property Management Fees?
Last but not least, ask about the management fees. Different companies offer different services but at various different price points. This means that some property management companies may be cheaper but offer you less at the end of the day.
This is not ideal as you will end up spending more money to hire a second company. This is why you should do some research and get comprehensive quotes from a few different companies before making your decision. When evaluating these quotes, be sure to look at what services they offer and how much they charge for each service.
Most property companies will base their management fees on the rental price. This means the higher the rent, the more they will make. While this may sound high, it’s actually a better deal. In this way, if you have to drop the price of the property, the management fees will drop as well.
There are often added costs involved such as tenant screening and move-in services. While these are important, check to see if the company will charge you for every tenant they screen or once off as part of the move-in process. The move-in process also includes legal documents. Make sure that you ask about the price of these legal documents as they can get expensive.
Once you’re fully aware of all the costs associated with partnering with a property management company, you’ll be ready to sign.
Professional Property Management Services
If you’re looking for professional property management services that you can trust, look no further than VerraTerra. With nearly 10 years of experience in the real estate industry, we offer a wide range of property management options to help you turn your second property into a passive income stream for you and your family.
From tenant screening to collecting rent on your behalf, we make owning a rental property easier than ever before.
If you have any questions or want to learn more about how VerraTerra can help you, feel free to contact us today!