Property management is a service business, meaning it’s all about relationships. Whether you own a multi-family building or are just starting out, you’ll need a reliable partner to help you run your property. That’s where choosing a property management company comes in. A company that manages rental properties for investors and homeowners alike can provide much-needed services like accounting, maintenance, marketing, and leasing assistance — from finding tenants to screening them.
If you’re ready to take the plunge and find a property management company to manage your rentals, we have good news: The process is pretty straightforward. In fact, it only takes six steps before you reach your final property manager finish line. Read on for details on what every phase entails as well as helpful tips to keep in mind as you venture through the process.
What is the process for choosing a property management company?
When it comes to managing a portfolio of rental properties, the first step is often the hardest. It’s crucial to have an idea in mind of the type of company that will best fit your needs. If you’re just getting started, you’ll want to target a company that specializes in managing the type of property you own. This initial search begins with doing some internet research. You’ll want to look up general information like management fees, hiring practices, and services offered before narrowing down your search to specific firms.
Once you’ve found a few companies that seem like a good fit, next comes the interview process. Since most companies don’t publicize their interview process, you’ll want to try to think like a prospective hiring manager and ask yourself what questions you’d ask during an interview. This will help you pick questions to ask during your interviews.
Know your options
For many new property owners, the thought of hiring a third party to manage their assets can be a little overwhelming. While it may seem like a lot of work, there are many benefits to choosing a property management company. These include:
- More rental income. When you own a building, you’re likely missing out on potential rental income because you’re dealing with all the administrative tasks involved. If you choose a property management company, you’ll have someone else handle the nitty-gritty, leaving you with more time to focus on other aspects of the business.
- Less risk. While there’s always some risk when it comes to investing in real estate, there’s also less risk with a property management company because they are experts and have managed many properties for many years.
- Higher rent. If your tenants are happy with the service they’re receiving, the rent will likely increase. And while this may not be your goal when starting out, it’s something that happens often over time as tenants become more familiar with the staff and overall level of service.
Research property management companies
The first thing you should do before picking a property management company is to conduct thorough research on the industry as a whole. Invest in a few hours of online research to learn about trends in the real estate management field. Investigate how your new company stacks up against the competition and make sure you’re aware of any complaints or lawsuits filed against them.
Next, pick a few companies that seem like good fits for you and your portfolio and make plans to interview each one.
Interview prospective property managers
Now that you’ve narrowed your list down to a few companies, it’s time to start interviewing. This is a crucial part of the process and you don’t want to waste your time interviewing the wrong people. There are a few things to keep in mind as you interview:
- Ask the right questions. Interviews are meant to be a conversation, so you want to be sure to keep your questions focused on the answers. Avoid vague or open-ended questions and try to keep your interview time to 15 minutes or less.
- Be yourself. It’s important to remember that you’re interviewing a potential business partner. While you may want to find faults with the companies you’re interviewing with, they are also interviewing you You don’t want to come off as too harsh or critical.
- Remember the golden rule. If a company seems too good to be true, then it probably is. If a company seems too cheap or off-putting, then they probably aren’t the right fit for you.
Ask tough questions during the interview
Once you’ve completed your interviews, it’s time to start picking a new property management company. During your interviews, you may have noticed something interesting: While all companies have similar interview questions, some have more potential pitfalls than others. You may want to choose a company with fewer red flags.
One of the first things you may want to look at is the company’s background. Be sure to look into the company’s record and see if there are any complaints filed against them. If you notice any red flags right away, take the conversation offline with a manager and see if they can clear up any confusion.
Property management can be a tough job. If you’re in charge of overseeing a complicated set of assets, you’ll need to make a lot of decisions. It’s important to keep things simple and hire a company with a proven track record.
The best property managers have been around for years, have solid reviews, and can help you manage your portfolio efficiently. They’re experts at finding the perfect tenants, keeping your building in good shape, and collecting rent without hassle. They’re also great at negotiating contracts and finding ways to cut costs. That’s why it’s important to choose the right company for your portfolio.
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