A great property manager is a landlord’s best asset, especially if you are a long distance landlord. But you need to know how to hire a property manager. Here’s your guide to finding the best property manager.
Choosing to become a landlord means taking on a lot of responsibility. You have to ensure you follow local landlord/tenant laws and that your tenants are paying their rent on time and you can handle maintenance issues.
Many landlords aren’t interested in the day-to-day dealings of owning property. If you live long distance, it’s essential to hire a property manager. Landlord responsibilities can be time consuming and stressful. Many property owners prefer to hand the reins over to someone who can handle it for them.
Which is why hiring a property management company makes a lot of sense. Rental property management companies can handle everything while you sit back and earn money.
But it’s not as simple as that. If you hire the wrong property manager, it could cost you a lot of time and money.
To help make sure you make the right decision, here are some tips on how to hire a property manager.
If You Want to Know How to Hire a Property Manager, Learn How to Be One First
One great way to ensure you hire the best rental management services for your building(s) is to learn the business yourself from the ground up. You’ll then know exactly what needs to be done and the proper way to do it.
That way, you’ll know whether the rental management company you hire is doing their job properly. You’ll also be able to spot any issues before they become huge problems. Even if you just manage your property for a few months, you’ll gain valuable experience.
Often, what you don’t know can hurt you, so learn the ropes yourself before you hire anyone else to do it for you. If you don’t have the personal experience of managing your rental, draw on your experience as a tenant in the past. As a tenant, what did you appreciate about your landlord? What made you frustrated? Keep these things in mind as you consider hiring a property manager for your rental home.
Join Your Local Real Estate Association
Another great way to find rental property management companies who provide great services is to join a local real estate association. You’ll find there are plenty of other landlords who have already gone through the same experiences.
They’ve already found out which rental management companies hire great employees who are trustworthy. And you’ll find other landlords can help answer questions you may have.
In larger communities, you can find Property Owners Associations. These people will be a great resource for you and you’ll find a lot of support by attending their meetings.
Remember, You Get What You Pay For
Less expensive doesn’t mean better, especially when you’re hiring a property manager. Don’t base your decision solely on the price.
Check to make sure that the property management company offers a wide variety of services in exchange for their fees. Don’t forget to identify all of the fees the management company might charge you.
Then, do a comparison against other rental management companies. Before you sign on the dotted line, make sure you know about all types of fees you may be charged and negotiate the best price for their services.
How much do property managers charge?
Most property managers base their fees on a percentage of the rent charged. In real estate markets, like the Seattle area, this can be costly. In 2020, the average rent in Seattle is just over $2,100, and that’s for an average of less than 700 square feet. This means, if you hire a property manager who charges 10% of your rental rate, you’ll pay $210 a month. If you own a single family home in the Seattle area, your rent is likely to be much higher than this.
Some property managers charge a flat fee, regardless of the rental rate. For example, VerraTerra charges a flat $150 per month for full service property management services. If you hire a flat rate property manager, it’s important to verify exactly which property management services are included. Hiring the right flat fee property manager can equal a tidy savings on an annual basis. Considering most people thinking about renting their home are doing so to increase their financial standing, these savings can be important.
Ask For References
Obviously, no rental management company is going to tell you that they’re going to charge you a lot and then not deliver on any promises. Which means, it’s your job to ask for references.
Don’t be afraid to call up other landlords who are currently working with the property management company you’re considering hiring. Ask the landlord what types of services the management company provides to them.
Check to see if they’ve had any issues or problems with the management company and if so, how these problems and issues were handled. The more you know what you’re getting into, the more likely it is you’ll hire the best property manager.
Check Their Qualifications
There are certain requirements that rental management services must comply with. They vary from state to state so check with the National Property Management Association to find out what the rules are where you live.
No matter where you live, the management company must be licensed real estate agents because they’re acting on your behalf to lease and manage your rental property.
List Your Expectations and Ask Questions
To make it easier for yourself and for the rental property management companies you interview, make a list of expectations you have for the company you hire.
That way, there are no unexpected surprises in the future because you’ve already outlined what the expected duties are. But don’t stop there.
It’s possible some companies may not answer honestly so you’ll need to ask a few questions to make sure they know how to handle issues that typically come up.
Here are some questions to ask when hiring a property management company:
- How do you advertise and fill a rental vacancy?
- Will I pay a property management fee if my property is vacant?
- How do you determine a fair market rental rate?
- How do you screen new tenants?
- How long, on average, does it take to fill vacancies?
- Do I have to be involved in the tenant selection process?
- How do you handle tenant maintenance requests? What about emergencies?
- How are delinquent rents handled?
- Will you handle evictions if needed?
Finding the best tenants is an important key to being a profitable landlord. Ask what the property manager’s process is for screening rental applicants. Determine how long, on average, it may take the rental management company to fill any vacant units you have. As how they can help you determine a fair market rental rate.
Have them tell you how many units they are currently managing. This will help you determine if they can grow as you do.
Find out if their property managers are local. Property managers who are familiar with the area will have an easier time filling vacancies and help you arrive at appropriate rental rates. Charging rent that’s too high for the market or neighborhood means your home may sit empty, costing you money.
Every rental, no matter how well maintained, will have tenant requests for repairs or emergencies. Determine the property management company’s process for maintenance requests. You’ll want to know that the emergency call in the middle of the night will always be handled reliably. The timeliness of handling tenant requests is the biggest factor in renter satisfaction. This leads to less turnover, limiting your vacancy rate and maximizing your profit.
Find out how the property manager deals with tenants who don’t pay their rent on time. Lastly, make sure they know how to handle evictions and have experience doing so. As disheartening as it may be, being a landlord means you’ll likely face this possibility at some point. If you are a long distance landlord, knowing the property management company you hire can handle this, will give you peace of mind.
They Possess Good Communication Skills
There are few things worse than going through the process of looking at rental property management companies only to hire one who refuses to communicate with you.
During the hiring process, look to see how quickly they return your calls. Ask how long it typically takes for them to return calls and e-mails.
See if they interrupt you while you’re speaking. A management company who doesn’t listen to you before you hire them won’t get any better after you hire them.
Choose a management company who puts your needs first. If you get the sense that they are more interested in your money than delivering the best service, keep looking until you find a property management company who puts you first.
Work With Us
Now that you know how to hire a property manager, we hope you consider us. We’re a full-service property management company who charges a flat fee, saving you about 30% on the average property management fees in the Seattle, Everett and Mill Creek areas. The money you save will help make your rental property more profitable.
We also manage everything from single-family homes to multiplexes. To learn more about how we can make your life easier, click here to learn about what services we offer.