Whether it’s because you no longer have the time to manage, you’ve acquired more properties, or you just want someone with a little more experience to handle your property, a property manager can likely help you with your problems.
Gone are the days where you’re forced to do your own maintenance, select your own tenants, and handle property accounting. These days there are hundreds of good property management companies to choose from that specialize in managing homes just like yours.
However, not every property management company is the same. Between different prices, philosophies, and services, it can be difficult to narrow down which company is right for you.
To help you through that process, we’ve come up with a list of 5 questions you should always ask a property manager.
- What kind of involvement do I have as an owner?
- How often do you do inspections?
- How long are your properties typically on the market?
- How long will it take to make my home rent ready?
- How do you screen tenants?
The goal of these questions is to help you figure out which companies will best be able to serve you and take good care of your properties.
1. What kind of involvement do I have as an owner and what decisions do I get to make?
All management companies are different. A property manager will serve as the middle man between the landlord and the tenant. This relationship works best when you let the property manager have the majority of the control.
If you’ve managed your own properties before, you might be hesitant to fully let go and let someone else do all of the work. However, if you are micromanaging everything the property manager does, it will likely slow down the process.
For example, when a property management company first takes on your property, one of the first things they’ll do is a walkthrough of your home. They’ll inspect the exterior, the front and backyards, and all of the rooms. The goal here is to see what aspects of your home might need to be updated or replaced. As the owner, you have the final say on which updates are made as you are the one paying for it.
Property managers will likely notify you about big repairs and emergency repairs as well. Minor fixes usually aren’t worth the extra time it takes to notify you.
2. How often do you do inspections?
Routine inspections are an important part of good property management. This insures that your property manager is monitoring the property and any issues that may arise with it.
A property management company should inspect the property a minimum of once per year, preferably every six months. They should have a checklist of what they are looking for, i.e. chipped paint, old water heaters, etc.
Annual inspections provide the property managers with the opportunity to catch any unreported maintenance issues or tenant-caused damage. It’s best to address these things quickly as letting a problem fester for a mere two extra months can cause a lot of damage.
The manager can also check for any unauthorized pets or tenants in the home. If someone did not put down a pet deposit at the start of their lease, but you see obvious pet damage, you can make note of that.
At some point, they will have to inspect the home while it is occupied. They should be letting tenants know beforehand when they plan to come, and at least one person should be home. This also allows for the tenant to bring up any issues or problems they may be having with the home.
Doing these inspections, annually or biannually, gives you and the property manager reassurance that things are running smoothly.
3. How long are your properties typically on the market?
Make sure you ask what the company’s vacancy rate is. Property management companies should be tracking their vacancies. If they don’t know this number, it likely means they aren’t keeping track of their data.
Because of this, they won’t know how to fix long vacancies if they don’t know how many they have. A property should typically rent within 30 days of putting it on the market. If they have many properties that exceed this number, ask them why.
Longer vacancy rates could mean that the properties are priced too high. Sometimes a home gets priced too high because of the neighborhood it’s in or the features attached to the home. An experienced property management company should be able to take these factors into account and still accurately price the home.
It could also be because the property isn’t advertised properly. Poor quality photos that don’t do justice to your home can make it hard to garner interest in your property.
4. How long will it take to make my home rent ready?
It’s important to know how long it will take to get your home ready to put on the market. You might be expecting the property management company to put your house up as soon as they acquire it, but there are a couple factors that go into this.
When a property manager takes on your home, one of the first things they will do is evaluate your home for needed updates and repairs. A typical make-ready (the process to get your home ready for rent) at Good Life takes roughly 7-10 days, depending on the property.
Older homes will typically require more updates than modern homes. If your home has a lot of outdated light fixtures, old wallpaper, and peeling paint, it might take a few more days than expected.
While you might want them to speed things up and get the house on the market, it’s best to listen to their recommendations. When it comes to updating your home, they know what will attract and keep tenants. After all, nice homes typically attract nice tenants.
The goal of this question is to establish a timeline and keep expectations realistic.
5. How do you screen tenants?
Property management companies generally have specific criteria when it comes to screening tenants. For example, at Good Life, we check credit, criminal history, income verification, and rental references. This is standard for most property managers.
A property manager should always run a credit check on an applicant. A low credit score is usually below 619 and can affect your initial deposit amount. It is typically required that the applicants make at least 2-2.5 times the rent as a household. If a co-signer is required, this might be higher.
Another important aspect of tenant screening is checking their rental references, whether it be an apartment complex or former landlord. This allows you to confirm with their prior management that they paid rent on time and were good tenants.
It also ensures that they are not lying about previous rental history and clarifies exactly who they were renting from. Some people will put down a parent or friend as a landlord, thinking you might not check their references.
When it comes to the selection of the tenant, most property management companies will pick the tenant themselves. They usually recommend this because there are a number of Fair Housing laws that owners are not aware of. If they are responsible for picking the tenant and end up violating one of these laws, it can be an expensive mistake.
Even if you think, “Well, I don’t really want to rent my home to college students/a family with kids,” that is against the law. It might seem like a simple thing, but any kind of discrimination is discrimination. It’s best to leave it to the professionals as they likely have a written, non-discriminatory rental criteria.
There are typically two different ways property managers select a tenant--best qualified and first qualified. Best qualified is when the property manager waits to receive a decent amount of applications (this will vary depending on how quickly the property acquires them) before selecting a tenant. This allows them to screen multiple potential tenants and choose the one that is the best fit for your property.
First qualified means that the property manager will select the first tenant that qualifies, i.e. they have good credit, rental references, etc. The downside to this is that you don’t see as many applications. You might push through the first qualified but miss out on someone that had better credit or a longer list of rental references.
These five questions will help you decide which property management companies are right for you. They’ll also help you distinguish between an unorganized company and one that has the experience you need to successfully manage your properties.
At Good Life, we know that the search for a property manager can be a difficult process. To make this process easier, check out our 4 steps to hiring a San Diego property manager article!