Important Questions to Ask a Potential Property Management Company
Owning rental properties can mean a very handsome income, but managing those properties is often more than one person's job. It's good to have a professional property management company handle this for you so you can concentrate on growing your portfolio, and they can ensure that your properties are managed legally and effectively. Before you hire any such company, note some vital questions to ask so you know what's involved in their service.
1. Ask if they handle marketing for you
Don't confuse a management company with a real estate agent or marketing firm. A management company may simply maintain the property and collect rent, and may also walk prospective tenants through the property but not actually market it. On the other hand, some companies will work with you to list your property on various rental websites and in magazines, and also to create classified ads and other such marketing strategies. This may be more costly but it may be needed for you to keep your properties occupied. Whatever your choice, don't assume that marketing is part of management but always ask.
2. Ask how they check on prospective tenants
Typically a property management company will check on a tenant's credit history and verify their employment or income, but you also want to ensure they do more than that. A reference from their past landlord about how timely they were in paying their rent is good, and you should also have a management company that will check on potential criminal records. Don't assume that a management company will do all this as they may only offer a few checks of prospective tenant and in turn, you may find that you wind up with tenants who have a criminal past or who struggled to pay rent in their last location.
3. Ask about their move-in checklist
A good property management company will have a checklist of what they inspect before a tenant moves into any property. This can mean checking for cleanliness, that all appliances are in good working order, that there is a fully charged fire extinguisher on the property, and so on. If they don't have a good checklist for tenants that are moving in, this can be a warning sign that they're not doing everything they can to protect a tenant's interest. You may wind up with new tenants who are unhappy right from their first day on your property and in turn, will lose those tenants once their lease is up.