In this investing market, it makes good sense to let a professional take care of your investment properties. That is, unless you enjoy receiving calls late at night, while you are on a much needed family trip, from your tenant about a backed up toilet or an air conditioning unit that has quit on an Arizona evening in August.
NUMBER ONE: Ability to Perform
How long has the management company been in business? The maxim that time on the job brings more information and experience is relevant when you are invested long term and have gone through the market volatility of the last fifteen years. You want someone who has seen the good, bad and UGLY parts of this market and is STILL performing on a high level. That brings up reputation in the market. What do other investors say about this company? How are their financials? Are they being led by someone with enough experience and vision to go the distance? And what kind of opportunity do they present to not only manage your investment, but to increase your holdings? Ask what the vacancy rate is. The average vacancy rate with a reputable company in today’s market is between 30 to 45 days if the property is priced correctly and looks good.
NUMBER TWO: Fee Structure
What does it cost you to initiate this relationship? Is there an ANNUAL fee? What is the MONTHLY management fee percentage? How much is spent advertising your property and how many media types are used to advertise? What is the commission when the property is leased? How does that compare to other property management companies?
NUMBER THREE: Advertising
What types of advertising will they use and how effective is it? What is the average length of time that a property is on the market before it is leased? When advertising is focused correctly, you have more qualified applicants. Will the company perform background checks and verification of information so you are given better foundation before you approve a tenant for your property? Appropriate advertising delivers more qualified applicants and increases the possibility of a better rent because of competition for your desirable property. How many phone and email inquires do their leasing people handle in a day? How many leasing agents are on staff? What is the average vacancy time?
NUMBER FOUR: Services Provided
You have to consider your options. What can the management company do for you? I think the following are minimum requirements:
- Present pre-qualified tenant applications.
- Tracking services for your investment, online so you can access at any time, anywhere.
- Collect monthly rents, deduct management fees and deposit in your account monthly.
- Collect municipal use tax from the tenant and make payment to city.
- Prepare and sign lease with tenant, collect application fees, move-in fees and deposits prior to tenant move-in.
- Tenant has proof of Rental insurance on property prior to tenant move-in.
24-7 online owner accounting system.
- List property with photos and pertinent information on multiple sites and venues for advertising.
- Inspect your property, take photos and recommend repairs or improvements to make the property more marketable.
- Answer all tenant calls for maintenance or repair issues.
- HOA violations.
- Evictions, when necessary and make rent ready in timely, efficient manner so property is off market a minimum of days.
- Make recommendation of property rental value based on comps and market conditions.
NUMBER FIVE: Maintenance
What happens if something happens? Will the management company protect your investment the way you would?
- 24-7 Tenant access to property manager for maintenance or repair issues.
- Use licensed contractors for all maintenance and rent ready work.
- All tenant improvements done by licensed contractors.
- Bid proposals for work to owner for approval.
- Digital Photos of Property Before and After cosmetic work is completed.
- 24 hour maintenance service to handle anything from a garbage disposal to air conditioner repair.
- Painting, cleaning, carpet cleaning, rekeys, trash removal, yard clean up, blinds, doors, windows, appliances.
- Full service maintenance.