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Hiring the right property manager is critical for any rental property owner. Whether you're new to the rental game or a seasoned investor, the property manager you choose will significantly impact your property’s performance and your peace of mind. But how do you know which property manager is the best fit? Here are five essential questions you should ask before signing on the dotted line.
Question 1: How many rentals do you manage?
When interviewing property managers, it’s essential to understand the scale of their operation by asking how many properties they currently manage. This gives you insight into their business size and the level of service you might expect.
Why does it matter?
Knowing how many properties a manager oversees can provide a glimpse into their capacity to handle your property and the systems they have in place. For instance, if a manager oversees 200 properties, they are likely a smaller, boutique firm. This can mean more personalized service—such as being able to reach the manager directly via phone. A smaller company might offer a "mom and pop" feel, and you'll likely have more one-on-one time with the person in charge of your property.
On the other hand, a manager responsible for 1,000 or more properties has likely scaled their operation, implying they have more robust systems and processes. They might leverage economies of scale that provide you with better pricing on certain services or enhanced access to technology, such as online portals for communication or financial reporting.
Smaller vs. Larger Property Managers
Boutique managers might provide more hands-on, individualized service, while larger companies offer established procedures and possibly cost-saving advantages. Knowing your priorities—personal touch vs. scalability—can help you decide which kind of property manager suits your needs best.
Question 2: How do you determine my rent amount?
Your rental property’s success largely depends on pricing it correctly. When you ask this question, you’ll want to know how the property manager approaches rental market analysis.
What should you expect?
A good property manager should conduct a comprehensive rental analysis to determine your property’s optimal rent amount. This involves pulling comparable properties from the area, analyzing their rental prices, and comparing the number of bedrooms, bathrooms, and other features. Ideally, the manager will combine market data with their own experience managing similar properties in the same neighborhood.
For example, if they already manage several homes in your area, they should have a good sense of what rent is realistic. However, they should also visit your property to assess its condition, layout, and any unique aspects that could affect its marketability.
Collaboration Is Key
It’s beneficial if you, the owner, have a number in mind to start the discussion around your property’s rental rate. But keep in mind, the market dictates rental prices. If the property is priced too high, you’ll get fewer showings, which means less competition and longer vacancy periods. Conversely, if you receive many showings but no applications, it might indicate there’s an issue with the property, such as an awkward layout or a maintenance issue.
Ultimately, listen to your property manager’s advice—they’ve likely seen many properties in your area and know what works.
Question 3: Do you conduct property inspections?
Property inspections are crucial for maintaining your investment and ensuring that your residents are treating it well. When you ask this question, you want to know if the property manager will be proactive about inspecting your property, both before and during tenancy.
Initial Inspection
A preliminary walkthrough of the property is essential, especially if the property is vacant. This ensures it’s "rent-ready" and meets safety and habitability standards. A good property manager will check for issues like outdated paint colors, leaky faucets, or any minor repairs that could be made to maximize your rental income.
However, the purpose of this inspection is not to conduct an exhaustive home inspection but to identify factors that could impact the property’s appeal to residents.
Ongoing Inspections
Beyond the initial inspection, the property manager should conduct regular checkups, ideally once a year. Too many inspections can intrude on residents' privacy, but too few could lead to undetected damage or maintenance issues. A well-balanced approach is key, especially if you have long-term residents.
If your manager isn't conducting regular inspections, there could be issues that go unnoticed until they become costly problems. Work together to find a frequency that balances proactive action with respect for your resident’s privacy. We find that annual inspections strike this balance well.
Question 4: Do you have any guarantees?
As a rental property owner, worst-case scenarios can be anxiety-inducing. What if your resident doesn't pay rent? What if they damage your property? Asking a potential property manager about guarantees can help put your mind at ease.
Resident Eviction Guarantee
Some property management companies, like Evernest, offer a resident eviction guarantee. This guarantee typically states that if a resident must be evicted within the first year, the company will replace them without charging you another leasing fee. This can be particularly reassuring for landlords worried about finding good residents.
Maintenance Guarantee
Another valuable guarantee is a maintenance warranty. For instance, at Evernest we offer a 12-month warranty on our maintenance work. If we repair a faucet and it leaks again within the warranty period, we will fix it at no extra cost. Guarantees like this protect you from being overcharged for recurring issues and show that the management company stands by their work.
Guarantees also reflect a property management company’s confidence in its resident screening process and maintenance services. It’s worth asking what kinds of assurances they offer, as it can provide peace of mind and financial protection.
Question 5: How does maintenance work and are there any markups?
Maintenance is an inevitable part of property management. Understanding how your property manager handles maintenance requests is essential to ensure smooth operations overall.
Reserve Fund for Repairs
Many property management companies require owners to maintain a reserve fund for maintenance issues. This ensures they can promptly address repairs without waiting for additional funds from you, which keeps your residents satisfied and minimizes disruption. For example, if a toilet breaks, it can be fixed right away without waiting for your approval. These funds are yours and are only used for property repairs.
Third-Party Vendor Markups
While some companies, like Evernest, use in-house maintenance vendors, it’s more common for property management companies to use third-party vendors for maintenance work, such as plumbers or electricians. What’s important to know is if they mark up these services. Markups are normal, but transparency is key. Knowing the markup percentage helps you anticipate how much you’ll be spending on routine or emergency maintenance.
Communication Preferences
Discuss with the property manager how you want to handle maintenance updates. Some owners prefer to be notified for every minor issue, while others only want to be contacted for major repairs and prefer to review all other expenses on their monthly statement. Remember, residents expect timely repairs, so too much back-and-forth on minor maintenance could lead to delays and dissatisfaction. A streamlined process is best for everyone involved.
Final Thoughts: Asking a Property Manager the Right Questions
Hiring a property manager is a decision that requires careful consideration. Asking these five questions can help you evaluate whether a potential manager is the right fit for you and your property. By understanding their portfolio size, rent pricing methods, inspection protocols, guarantees, and maintenance processes, you'll gain valuable insights into how your property will be handled. With the right questions, you can ensure your property—and your investment—are in good hands.
If you’re in the market for a seasoned property management company, consider Evernest. We help property owners across the country navigate the ups and downs of rental property management and can help you find the right solution to fit your needs.
