How to Find a Good Property Manager
Want to know how to find a good property manager? Start by defining your needs, then follow a plan.
Hiring a property manager can simplify your life and boost your rental property investment, but only if you hire the right one for you.
Why use a property manager?
Have one rental investment property? Have 100? No matter the number, you may find that it’s in your best interest to use a property manager. A property manager’s work has a direct impact on your investment’s bottom line, so it’s imperative that you find the best person for the job. This is not the time to hand off the reins to the first property manager you run across or your old high school friend with a real estate license who dabbles in property management.
Some landlords may use a property manager simply because they don’t want to get their hands dirty in the day-to-day operations of the rental—whether that’s finding a new tenant or arranging for a plumber. Other landlords have property investments in cities that are far from where they live, necessitating hiring someone on the ground to do the hands-on work. Still others have too many properties to manage effectively.
What does a property manager do?
Before we jump into how to find a property manager, let’s look at what they do. A property manager usually takes care of the following:
- Advises on proper rental amount and markets the property
- Screens potential tenants for red flags, while staying within local laws
- Either signs a new rental tenant or renews a current tenant’s lease
- Collects rent, handles late rental payments, and facilitates eviction if necessary
- Deals with immediate tenant maintenance requests
- Conducts preventive maintenance
How much does a property manager cost?
Some property managers charge a flat monthly fee. Some property managers offer a menu of services. Still others charge a percentage of the rent, generally somewhere between 8% and 12%. Depending on your needs, one option may be a better fit for you financially. Evaluate what part of the landlord duties you want to hand over and which ones you want to control fully. You might prefer to be involved in the rental process itself, but have the management company handle month-to-month issues, like collecting rent and answering the call about the broken plumbing. Or, vice-versa. Or, you may not want to lift a finger.
Qualities to look for in a good property manager
- Specializes in the type of property you own
- Is deeply connected to the rental market in the area
- Offers a clear contract that specified services provided and costs
- Deals pleasantly with both landlords and tenants
- Responds quickly to both landlords and tenants
- Is neither overworked or underworked
- Is properly licensed and insured
- Has stellar references
- Is part of a national organization, such as NARPM or IREM
How to find that awesome property manager
Network to find the right candidates. Like many things in life and business, it’s great to start your property manager search with recommendations from your personal network. But don’t stop there. Just because a property manager worked for a friend or business associate doesn’t mean they’re the right person for your situation.
ID the property manager’s specialty. It’s imperative that you hire a property manager who specializes in your type of property. Commercial property managers do different work than residential ones. And a manager who’s used to handling big buildings might not be right to manage your single occupancy house.
Interview your property manager candidates. Yep, you’re conducting a job interview when you hire a property manager. That means you’re evaluating everything from personality to work history to their passion for the job. Once you’ve met, you’re going to want to follow-up by reaching out to a few references and doing a search for reviews on popular online sites and places like the Better Business Bureau.
Go over the contract. A good contract spells out exactly what services you’re getting and the cost. Beyond the standard items, like how the rent is collected, here are a few extra things to look out for:
- Do you pay a fee if the rental is vacant?
- Do you pay a fee if you need to cancel early?
- Does the company offer an eviction warranty?
- Is there a fee for facilitating maintenance and repairs?
Don’t be afraid of getting too granular or of asking too many questions. You don’t want to sign anything until you know exactly what’s involved and how much you’ll pay.
Take your time. Like any business deal, don’t jump into a relationship that doesn’t seem right. Your property manager becomes part of your business, and you should not treat the decision lightly. Find the right one and you can be confident that your investment is being well taken care of, your tenants are happy, and your property is making the maximum amount of money.