Some real estate investors get into the business solely to generate income. As a property owner, you still have the responsibility to maintain your properties; comply with laws, building codes, and regulations; and manage relationships with tenants. An experienced, trustworthy property management company can do all of that for you and more. How do you choose a property management company you can rely on to protect your reputation as a landlord and ensure compliance with housing laws and codes?
Look Online
Start your research online, looking for property management companies that serve properties located near yours. Look at profiles and reviews. Find out how long they’ve been in business and what kind of, and how many, properties they manage. Property management should be their core business, not a sideline.
Get Referrals
Ask friends if they know of property managers in the relevant area or ask for referrals to real estate agents who may know of good management companies. Activate your network of fellow real estate investors and get some names. Ask for positives and negatives, and be impartial.
Check Licensing, Professional Certification, and Insurance
Check for state and local licensing and professional certifications. Several national professional organizations, such as the National Association of Residential Property Managers and the Institute of Real Estate Management, offer comprehensive certification programs that require a significant investment of time and commitment to complete. Earning these certifications is a sign of professionalism and concern for their own reputation. Certification means they take their profession seriously, including their duties to you, the property owner.
Get proof of insurance, including property, liability, and “E&O,” or errors and omissions insurance. Understand that you as the property owner should, and may be required, to carry sufficient insurance.
Conduct Detailed Interviews and Ask for References
Once you have narrowed your list to licensed, certified managers, set up interviews. Ask questions about how they conduct marketing and screen tenants, collect rents, what their fees are, vacancy rates in properties they manage, and how they will handle your money and tenants’ security deposits. Pin down when and how often they will contact you and how you will be able to contact them. Ask for at least three references, and check them.
Visit Properties They Manage
Visit several properties your candidate companies manage, and note If they are attractive and well kept. Speak to tenants and ask if they’ve had concerns and if the management addressed them promptly and courteously.
Review Their Contract and Their Leases
Read their contract, and make sure you understand all its terms, including the period of the contract, the responsibilities they agree to take on, and any duties that remain with the property owner. Don’t enter a multiyear arrangement with a new property manager. A one-year contract is more typical. Also, ask to see the lease agreement they use with tenants.
These are some of the main things that will help you choose a property management company, whether you own property down the street or across the country.