If you have an investment property in Bellevue, Washington, then you likely want to hire a property manager to take care of the details of running the property. Choosing the right one is, of course, absolutely vital, and not that easy. You want to make sure that your Bellevue property manager will support your interests while treating your tenants well.
So, what questions should you ask your potential property manager?
How Many Properties Does The Bellevue Property Manager Oversee?
Ask how many properties they oversee. A low number might indicate that they are having issues finding clients, potentially for a reason. However, you may not want to hire a huge company that has a lot of clients, increasing the risk that your property will fall through the cracks.
Make sure that the property management company is of a size you are personally comfortable with and that they have the staff to add your property. VerraTerra, a Bellevue property manager, manages nearly 300 properties in Western Washington, including many properties in Bellevue. We’ve found a perfect balance as a local property manager.
Bellevue Property Manager: What Are Their Rates and Fees?
Bellevue property managers generally charge a percentage of your collected rent, typically 8% to 12%, and there may be other fees such as a set up fee, tenant placement fee, and repair and maintenance costs. As of September, 2023, median rent in Bellevue for a 3 bedroom home is nearly $4,000. This is a great opportunity and time for Bellevue landlords. However, if you hire a property manager who charges a percentage of rent, this can really cut into your rental profit.
Find out ahead of time what the company includes in their fees, what they charge extra for, and make sure there are no hidden fees which could result in “sticker shock” when you get your bill. Remember that cheaper is not always better and you do get what you pay for. However, a lot of hidden fees are likely to be a red flag.
Some Bellevue property managers, charge a fixed property management fee, regardless of the price your home rents for. This saves landlords a significant amount of money. With a flat rate property management, you have a great opportunity to maximize your rental profits, especially in this hot Bellevue rental space.
Oh, and make sure that it is based off of rent collected rather than rent due so you are not on the hook for anything if a tenant is unable to pay or pays late.
How Do They Find and Screen Tenants?
Ask how they find and screen tenants. Where will they advertise your property if it becomes vacant? Ideally, you want a company that advertises across multiple networks.
Also make sure that they do thorough applicant screening and background checks to ensure that you have quality tenants who are more likely to pay the rent on time and less likely to trash the property. Quality tenants reduce turnover, giving you more stability in your rental income. You are looking for a property manager who will help you define your own tenant screening standards, but who will have recommendations based off of their own experience. You may want to do final interviews yourself, or you can have them handle it, but you want to be comfortable with the process and have it fit your own ethics.
Ask about their process for showing the property to prospective tenants and how they handle preparing the lease and getting the required signatures.
Also ask what they do if a tenant becomes a problem. How do they handle those issues which can slip through even the best screening process?
What Do You Have to Pay When the Property is Vacant?
A Bellevue property manager often charges a flat fee for each vacant unit. Make sure that if they do this fee is less than what you would pay if the apartment was occupied. The last thing you want is your management company to be financially incentivized to keep the unit vacant.
Make sure that these fees are clear and in the contract. Some companies may not charge a fee; this is ideal for you because they will be motivated to find a new tenant quickly.
How Do They Collect Rent?
Ask about the methods they have available to collect rent. You want to make sure that paying rent is easy for your tenants. Ideally, choose a company that allows for multiple payment methods which include automatic direct deposit (but not as the only option as some tenants are uncomfortable with it).
Ask about what they do if a tenant does not pay on time? Do they have a reminder system to tell tenants they are overdue? When are bills sent to collection agencies? What if a tenant has hardship or asks for a payment plan? Make sure you are on the same page with the management company about hardship requests and don’t let tenants play you off against each other.
And, of course, make sure that you are comfortable with how they will transfer the collected rent, minus their fees, to you.
How Do They Communicate With Tenants?
Find out what methods they use to communicate with tenants. What system do they have for maintenance requests? How do they provide customer service to your tenants? The answer may vary depending on the type of building you are renting out.
However, make sure that they communicate well with tenants. If needed, get references from their other clients. You never want to appear to be an uncaring landlord, so don’t hire an uncaring property management company. Make sure that tenants can make emergency maintenance requests at any time, whether or not they have a working computer.
If you have a larger property talk about what kind of regular communication you want with your tenants, such as newsletters.
What is the Procedure for Canceling My Contract?
Ask how you can cancel your contract when and if you decide to move on. Some property management companies are notorious for not allowing a good mechanism to get out. If there is no mechanism for early termination, consider this a red flag; if they want to trap you, you probably don’t want to stay.
Early termination fees are common, but they should be reasonable. (Always have an attorney look over the contract to make sure it’s not a trap).
How Often Do They Inspect the Property?
Find out how often they inspect the property. Property management companies will typically do an inspection when taking on the property (and possibly charge you for it). However, you should ask how often they do routine inspections to check for problems. How often do they have pest control come in to do preventive work?
Make sure that they are keeping an eye on your property and doing proper preventive maintenance (unless it’s a single family home and preventive maintenance is a tenant responsibility).
How Well Do They Know Federal and Washington State Rules?
Make sure that your property manager is versed in Fair Housing Rules and similar, and will not trip over them and potentially make you responsible for a compliance issue.
Ask them to explain the rules to you and if the explanation is inaccurate or unclear, look elsewhere.
Ultimately, you want a Bellevue property management company that will look after your interests, maintain your property well, and provide great service to your tenants.