Too many property owners go through bad experiences with their property managers. If you want to avoid problems with your property management company, you should start with the selection process. Learn how to choose property management companies that fit your needs and budget.
Choose Property Management Companies the Right Way
As a property owner, you can always opt to self-manage your assets. However, without the necessary tools and expertise, a lot of things can go wrong along the way. After determining that you need to hire a property manager, you must then begin the process of finding and selecting one.
As they say, prevention is better than a cure — and that applies to property management companies as well. Some property owners enter partnerships with the wrong companies and end up regretting it later on. In order to ensure you don’t run into the same issue, you must start from the very beginning. Here is how to pick a property management company the right way:
1. Search Online or Through Word-of-Mouth
Start your search for the best property management companies online. There are plenty of resources you can find on the internet, including online directories and review sites.
Make sure to look for companies specific to your location as well. There is no use talking to a company that does not even serve your area. A simple Google search should help you find options.
If you know any other property managers, it is also a good idea to ask them for recommendations. This way, you can obtain a firsthand review from the get-go.
A lot of property owners make the mistake of immediately hiring the first company they come into contact with, whether out of desperation or a lack of patience for the selection process. However, you must understand how important it is to choose property management companies that fit your requirements and are up to standard. Poor management can result in incredible losses on your part or, worse yet, legal trouble.
2. Check for Licenses, Credentials, and Reviews
After assembling a list of prospects, it is time to narrow down your search. First, it is imperative to check your state laws. Some states, like Florida, require property managers to carry a license. You can ask your prospects about their licenses or check your local real estate commission.
It is equally important to request company credentials. What kinds of properties do they typically handle? Do they have a comprehensive insurance policy? You can also get a feel for the company by checking for reviews online.
Although you can ask the company for references, they will usually only give you favorable ones. If they have any skeletons in the closet, they should appear in your search. If you find any online news articles or bad reviews from unsatisfied clients, ask the company about them.
3. Check Their Services
This is perhaps one of the most vital things you should consider when you choose property management companies. Assess your needs first and then see if your prospects can address them.
While most companies offer similar services, each one will have its own specializations and twist. Here are some of the usual services most property management companies offer:
- Setting rental rates
- Collecting rent
- Advertising your property
- Screening and selecting tenants
- Negotiating and signing leases
- Communicating with tenants
- Inspecting your property regularly
- Maintaining your property
- Coordinating with vendors
- Preparing and implementing emergency and disaster plans
- Handling your finances
- Complying with federal, state, and local laws
- Handling evictions
4. Ask About Fees
The price of a product or service is generally what most people ask about first when deciding whether to buy something.
In terms of property management, though, you should remember to balance the price with the company’s services. Don’t just pick the company with the lowest rate.
Of course, that does not mean you should select a property management company you can’t afford. On the contrary, find one that fits your budget but also delivers good-quality services and has a credible reputation.
That said, not all companies charge the same. Some take a percentage of your rental income as compensation while others charge fixed base prices. There may also be extra charges for additional services, operating on an à la carte basis.
When discussing fee structures, you should also ask about any hidden fees, such as lease renewal fees, eviction fees, maintenance fees, reserve fund fees, vacancy fees, and the like.
5. Set Up an Interview
It is easy for companies to put up a front when they are hiding behind a screen. Therefore, you must gauge a company in person by scheduling an interview. Once you have narrowed down your list to a more manageable size, set up interviews with them to ask important questions.
Learn about their vacancy rates, occupancy rates, and delinquency rates. Do they use property management software or an online portal? Find out how they screen and choose tenants, how they manage maintenance and repairs, and how they handle evictions.
Ask them about their response time and lease agreements. How do they remain compliant with related laws, such as the Fair Housing Act and the Landlord-Tenant Law?
It is also a good idea to learn about what your management contract will consist of if you decide to go with them. Make sure to get specific answers instead of more general, abstract ones.
6. Make a Decision
The interview phase should tell you everything you need to know about your prospects. From there, you can make your decision. Weigh out your options and choose the property management company that can address your needs while staying within your budget.
It is also essential that you feel comfortable with the property manager you ultimately choose. After all, you will be working with them for a long time.
The Road to Excellent Property Management Begins Here
As with everything, there is a correct way to choose property management companies. By following these steps, you can start your search on the right foot, narrow down your list effectively, and land with the best property management company that fits your budget and requirements.
Finding the right company for you can come as a challenge. Start your search for the best HOA management company, real estate company, or property management company using Florida Property Management’s online directory. We can make the search process easier!
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