As a property tycoon in progress you have the responsibility to try and hire the very best in the property management business. It is after all your property manager that manage a create deal of power over your return on investment. It is essential that you ask your 32 Questions for your new property manager before hiring.
1.Are you a registered and licensed property management team?
Hiring a licensed and registered property management team will be a much better option if any matter were to become a legal matter.
2. Are you insured?
Your property management team needs liability insurance at the very least.
3. How long have you been in the business?
A good number of years will be preferable of course, ensuring your property manager should be able to manage any situation. However this number counts less that it use too, today we have access to reviews and complain site.
It is strongly suggested that you conduct a peer to peer review research.
4. How many properties do you manage and how many employees do you have?
This is a tricky question to ask, because the answers can vary for several reason, all with their own legit reasoning. But the gist of this question should give you an idea of how big the company is (no. of properties being managed) for the number of employees. Make sure that one person don’t have to manage a 100 properties, it’s a quality check question
No more than 50 properties per person, at the very most. Also ask to meet your dedicated property manager, accountability can be a saver.
5. In what area are your managerial expertise?
Make sure your property manager’s area of expertise are the same as your property. If its residential, make sure your property manager focuses on residential properties and not commercial or industrial.
6. What are your communication response time between owner and tenants?
Make sure you have a property manager that is up to date with the latest forms of communication, such as email, sms/phone and social media. Their response time shouldn’t be more than 12 hours, after all your leaking geyser can do a lot of damage in that time.
7. What percentage of existing tenants renew their least?
You would want a property manager that has a high percentage rate here. This simply means that many (if not most) tenants choose to renew their leases, meaning they are happy. This will fundamentally mean less vacancies for you, with a better cash flow, resulting in an excellent property manager.
8. What are your fees concerning new tenants and re-leasing to existing tenants?
The market seems to go with a 75-100% of the monthly rent for new tenants. A lease renew however takes very little effort from your property manager, as such it should cost very little if not anything extra at all.
9. What are your managerial fees and what does it include?
This can run from 5-10%, if it’s more or less find out why. You will find that every property management works slightly different, it is for this reason that you should know what is and what isn’t included in your monthly fees.
10. Are there any hidden fees?
Some property managers have extra cost concerning initial account set-up, marketing, photography, rent ready setup and repairs.
Make sure you don’t get surprises.
11. Can I get a copy of the least agreement you sign with prospective tenants?
Give this document a proper read through.
Make sure that you agree with everything in how it’s conducted, and priced. After all it’s your property, your return on investment. Also some property managers have the contract between you the owner and the tenants, not between the tenants and the property management firm. Be aware of which you’re agreeing to and what direct consequences that may have for you.
12. Do you have a break out clause?
There are real advantage to having a break out clause in your contract. Unfortunately they may be needed.
13. When and how can I cancel my contract with you if I’m unsatisfied?
Some property managers try and fix you into a yearly bond, be sure you understand the terms of such an agreement. Otherwise find a property manager where you can walk away anytime, complication free.
14. What is involved in your tenants screening process?
Finding the perfect tenant every time is nearly impossible, but at the very least, you should be assured that you will get tenants that will never cross the “is it worth it” boundary. You should expect the following form your property manager:
- Credit Check,
- Background Check,
- Eviction Report,
- Pay Verification
- previous history of Rent Payments
Some landlords also request that the property manager runs the prospective tenants past the owner. Ensuring they too are happy with their options.
15. What is your average tenant LSM (Living Standards Measure)?
The idea is to try and understand who their average tenants are, what are their income level and their career paths. All income and tenant groups have their own advantages and disadvantages, you simply need to know what you may be getting yourself into.
Make sure you did enough research regarding this matter, you get good and bad tenants across the board, thusly be careful to stereotype.
16. If the damages exceed the security deposit, will you draw up the documents and pursue the tenant?
Every property manager is different in this department, it’s important that you know who is responsible for what.
This concludes part one to our 32 questions for your new property manager. Stick around for Part 2 to our 32 Question for your new Property Manager.
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- 32 Questions for your new property manager – Part 2
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