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How to Hire a San Diego Property Manager in 4 Easy Steps

Hiring a San Diego property management company can be a challenge, but doesn’t have to be. With these 4 steps, you will be on the path to success.

Most people looking to hire a property management company in San Diego don’t know what to look for or what to ask. With so many companies to choose from, it can be challenging to narrow down the best company for your home.

At Good Life, we’ve made owning rental property easy for over 1,000 San Diego property owners. We know what you should be looking out for when deciding between companies. These 4 easy steps will help save you time, money, and make the hiring process a lot easier. Be sure to check out the checklist linked at the end of the article.

Step One: Pick 2-3 Companies

There are two main ways people find property management companies: online and via referrals. If you are searching online, try googling things like “San Diego property management” or “best property management companies San Diego.” Peruse through the top 10 results.

Remember, the company’s office doesn’t have to be nearby for them to manage your property. Many owners think that since their home is in Clairemont, they should only search “Clairemont property management.” In actuality, this limits your options and your pool of potential property managers. Most companies will have a page listing the areas and neighborhoods they service, so be sure to check that out.

If you have a friend or family member that uses property management or real estate agents, check with them for any recommendations. They can provide you with personal experiences and let you know what to look out for.

Step Two: Online Reputation Check

Next, you’ll want to check their online reputation on Google and Yelp. Don’t consider any companies with less than 4 stars. Having 4 or more stars shows that the company is committed to excellence and they care about their customers’ experience. You want a company that cares about their reputation.

There are some things to know about how reviews work on each platform. Reviews on Google always stick, meaning they don’t get filtered out unless a user reports them. On Yelp, there is an AI that scans for “non-recommended reviews.” These can be reviews that are from accounts that were just created, have no prior reviews, or other miscellaneous reasons that Yelp deems untrustworthy. Ideally the companies you consider should have good reviews on both websites.

Step Three: Phone Call Test

This is an easy way to see how responsive a property management company is. Call them during business hours and see if they answer. You might think this isn’t that important, but we have found that only 20% of companies typically pick up the phone. If they don’t pick up the phone now, how can you be assured that they will when you’re their client? If they don’t pick up during the test, rule them out.

If they do pick up, make sure they can answer your questions.

Step Four: 10 Must-Ask Interview Questions

You likely have your own questions you want to ask your potential property manager. Consider adding in these important questions, too.

1. How is your company set up? Portfolio, departmental, or hybrid?

Most companies are set up one of these three ways. Portfolio means that one person is responsible for all aspects of a set portfolio of properties. They might manage 100 properties and handle the leasing, maintenance, marketing, etc. all themselves.

Departmental means that the company is divided by department. Specific team members are assigned to leasing, maintenance, etc. This allows people to specialize in one area and become experts in that field.

Hybrid is a combination of the two. Certain team members might handle a group of properties but within that they are divided by leasing, maintenance, etc.

2. Who will be my property manager?

Ideally you want a company where you will have a single point of contact. Constantly speaking with multiple people can get confusing and result in miscommunication. Don’t hesitate to ask about this person’s experience in the role and what exactly they will be doing for your property.

3. How many units does my property manager handle?

The answer to this will depend on how the company is structured. As a guide, if they are a portfolio manager, they shouldn’t be managing more than 100-150 units. If they are organized as a departmental model, 450 is the max. Hybrid models should be closer to 350. If they manage much higher than these numbers, it could be cause for concern. You don’t want your property to fall through the cracks.

Another thing to note is that when companies reach 400 units, some restructuring is often needed to adjust to the increase in units managed. This is just something to keep in mind when asking how many total properties they manage.

4. What was your average "days on market" last month?

This is a specific question looking for a specific answer. You want to ask about the most recent month because there should be hard data for this, not a “usually it’s around 15 days!”

5. How are repairs handled?

Ideally you want to be notified of every repair. Most companies have a maintenance threshold, meaning repairs under a certain dollar amount will proceed without your specified approval (usually between $250-$500). They will still notify you of the repair.

Maintenance is an area where you may experience a difference between an expert property manager and a property messenger. A messenger will simply relay info and ask you what to do. An expert manager will inform you of the problem and make a recommendation and a plan. You will be able to trust their advice and let them proceed how they see fit.

Ask if they provide photos of the damage and the repair. You want to be able to see what is going on in your home.

6. Do you inspect the property regularly?

Your property manager should inspect the home at least once a year. They should do a general inspection to see if there is any considerable damage or issues in the home. They should provide a report after this inspection with photos.

7. What are your fees?

Look for a company that uses a percentage for their management fee, i.e. 8% of the monthly rent. This is better than a flat fee ($150 per month) because it provides motivation to the manager to get the best rental price for your home. The same goes for a leasing fee. If the leasing cost is just included and not an additional charge, it can get overlooked or neglected. A leasing fee motivates the manager to get the best possible tenant for the best rental rate.

Their annual inspection should also entail a small fee. When there is no added cost, they often get pushed to the last priority or don’t happen at all.

Commission is like oxygen for a business. When commission is tied to a specific goal or process, the company usually will spend more time and resources on making it better. Remember that when comparing management fees, there will likely be a cost difference of only about $50. Management fees are also tax deductible.

8. Is there a fee to cancel?

This is good to know when signing a management contract. A lot of companies do a one-year contract that turns into a month-to-month contract. Make sure you check for an automatic renewal.

9. What will my property rent for?

With a few pictures and your address, your manager should be able to give you a rent estimate within roughly 10% of what the home will rent for. You want a detailed analysis with data to back it up, such as a rental report. If they provide you with a wide range, i.e. $2,000-$2,600, that isn’t what you’re looking for. A good manager will want to nail down the market rent early on in the process. Make sure you are on the same page.

10. How much will I spend on maintenance in the first year?

Maintenance costs can vary depending on the age and condition of your home, but by asking this you can prepare for upcoming expenses, even if it’s just an estimate. First you’ll want to know what the cost will be to make the home rent-ready. The home will need a good cleaning and likely a few repairs/upgrades to be ready for the market. There will be things you expected, such as carpet and painting improvements, but there will also be things like rekeying the home and landscaping that you might not think of.

You can often estimate a budget based on how old the home is. For a home less than 10 years old, setting aside 3% of the annual rent income makes sense. For 10-25 years old you can estimate 5%; 25-50 years, 8%; 50+ years old, 12%.

Other Things to Consider

Transparency

In 2021, you should be able to find all of the information you’re looking for on the company’s website. If it’s hard to find their pricing, this is a red flag. There’s nothing more frustrating for a potential customer than searching the website for answers and not finding any. You should be able to easily find things like available properties, management services, and a contact page.

Keep an eye out for educational content as well, such as a blog or FAQ page. This can show you how much they know about the industry, the market, and local laws.

Transparency also extends once they are hired. You want to feel like your manager is keeping you in the loop on important matters and feel like you know what is going on with your property.

Number of Reviews

We already talked about the importance of online reputation. In addition to making sure they have at least 4 stars, you should also pay attention to the number of reviews they have. A 5-star company is great, but if they only have 10 reviews, it will be harder to get an accurate depiction of what their service is like. This isn’t a deal breaker, just something to keep in mind when searching.

Website

Not only should you be able to find their pricing on their website, you should be able to navigate through pages easily. We are in the digital age, and if their website is outdated or difficult to browse, it might indicate a lack of organization.

Check out their available property listings while you’re at it. Do they take good photos and videos? Do they have good descriptions of the properties? This is how they are going to market your home, so take note.

Experts in the Industry

Good property managers will be knowledgeable about property management, their company stats, and the local market. They should be able to provide you with information on the following:

Average length of tenancy
Days on market
Average rent range for different neighborhoods
Average cost to make the average home rent-ready
Number of leases signed per month
Vacancy rate

As mentioned above, asking for their days on market for the most recent month can show you how well and how often they track their own metrics.

You want a company that is not only knowledgeable about their own processes and systems, but also about the changing real estate market and local laws that affect your property. Within the last two years, San Diego has seen many laws and regulations affect rental properties: AB 1482, SB 91, and Proposition 19, to name a few. One of the main benefits of hiring a manager is that they are responsible for adhering to these laws and keeping you informed of changes.

That’s it! Four easy steps to hiring a property manager for your San Diego home, plus some additional things to look out for. Don’t forget to download the checklist and check out our expansive guide on how to hire a property manager!

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Olivia

Content Marketing Manager at Good Life Property Management

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Tagged hiring a property manager

Most people hiring a property manager in San Diego don’t really know what to ask and they don’t really know what to look for. My name is Steve Welty. I’m the broker owner of Good Life Property Management. We’ve helped make only rental property easy for over a thousand odd property owners in San Diego County. And today I want to give you four easy steps to use when hiring a property manager. This is some good information. Some things you’re probably have never or have not thought about. And so I’m excited for you to watch this and I’m also going to include a link to the checklist. So you can use it and make the whole process really easy. All right, step one is you want to pick two to three companies to interview. And the way most people go about this is they’ll look online and or referral. Common sources of referrals are friends, real estate agents, wealth managers, insurance brokers, maybe a CPA. A lot of them know management companies so it’s good to start with maybe two you found online and maybe one referral. All right, step number two is the online reputation check. So go online and search Yelp and Google for these companies and you’re going to be able to read their reviews. Now Yelp is usually a little more credible because they have an algorithm that screens out what they don’t consider relevant reviews or real reviews. Whereas Google anyone can put a review up and it just sticks. So Yelp’s a little bit harder to game the system there so a little more credible. But you really want to look for companies that have at least a four star rating or higher. This just shows they have a commitment to, you know, really making their online reputation great. Really making sure they deliver a great experience for both the owner and the tenant because property management is a tough business to keep a good reputation. So you want to make this hiring process easy. So screen out any company that’s not at least four stars on Yelp and Google. All right, step number three is my favorite because it saves a ton of time and it’s just so simple. It’s just the phone call test. You call the company and if they pick up the phone and are able to answer your questions, they move on to the next round. Now you might think, well, that’s silly. Of course they’re going to pick up the phone. No, about 20% of companies we found will pick up the phone and even less will actually have someone pick up the phone that can actually help you. So that’s a really good bell weather how serious they’re taking the customer experience because if they don’t pick up the phone when you’re not a client, how often are they going to pick up the phone when you are a client. So that’s what I look for. They’ve got to pass the phone call test and they move on to the next round. All right, step four is the 10 questions. These are 10 questions to ask. You probably have other questions you want to ask, but you know, consider asking these questions. First is how is the company’s setup? And there’s three main ways property management companies are set up departmental portfolio and hybrid. Now portfolio is one manager handles everything. The departmental is it’s all split up. So there’s a leasing person and applications person, a maintenance person, a county person, etc. And then there’s a hybrid of the two. And why this is important is you want to have an idea of the pros and cons of each. So portfolio, one person manages everything. So it’s good because you have one point of contact. Some of the cons can be that they get burnt out because they do everything and also maybe if they leave the company or the art there on vacation, it’s hard for someone else to jump in. The departmental is good because they have experts at each department. So an expert leasing person and applications blah, blah, blah. But they each have a slice of the pie, which the problem can be sometimes is then no one really owns the whole pie. And so you end up talking to a bunch of different people and no one really owns the whole experience. So that can be an issue. Question number two, which will kind of elaborate on that more is who will be my property manager? Who am I going to work with? This is really important because this is really who’s going to be managing your property. And no matter what the system is, you really want to look for a company that gives you a single point of contact. Not that you won’t ever talk to other people, but you really want someone that is responsible ultimately for your property. And you want to really know who that person is. Like what’s the background? How long they’ve been with the company? What did they do before? You may even go so far as to ask to talk to that person because this is really who you’re going to be working with and you want to make sure you vibe and you feel comfortable with their expertise and all that. And so leading into question number three is how many units does this person manage? And so when you think back to the portfolio departmental hybrid model, I’m going to give you some thresholds of how many units each model can usually handle before things start to go wrong. So that you’re aware. Portfolio about 100 units max is as how much one person can handle in a portfolio model. So be cautious if they say they’re portfolio and they manage like 150 units or something hybrid, maybe 350 max. And then departmental, maybe 450 max. And then there’s a thing in our industry called the 400 unit. And it’s not called this, but the 400 unit kind of problem or the 400 unit kind of gap is when companies get to read about 400 units. Often times the systems that brought them to that threshold start to break down and it can lead to having a company have to restructure, which is fine, but it can also lead to issues where the clients stop getting the service they’re used to because the company is having to shift around. So it’s not like saying don’t hire a company at 400 units, but you might dig a little bit more if they’re right around that 400 unit mark and ask some more questions about, okay, well, I’ve heard about this issue at 400 units. Are you guys, how do you run your properties? Are you currently restructuring things like that just so you get a good feel for that. All right, number four is what was your average days on market for bacon properties last month? This is a very specific question. Look for a very specific answer. Not about 10 to 14 days on average, no, like last month, because this shows they actually track the number. They take the number seriously. And it shows they’re serious about customer success. So question five is how are repairs handled and what I like to look for is I want to be alerted of every repair in advance. Now management companies do have a maintenance threshold, which means to ultimately fix something or get approval. It’s usually 250 to $500 for an repair approval, but it’s good to be notified in advance. And then if it ends up costing more than that amount, they’ll contact you. And I really look for, I’ll ask about different scenarios with repairs. When I hired like a, you know, a lot of this was built off me hiring a management company for a property I own out of state. And I really want a manager versus a messenger. And so a messenger, you can tell a messenger company because their maintenance limit is really low. It’s like zero or it’s like $100 or $200. You want to manage your, who actually is going to manage the property well and know what to do and not just ask you what you want to do in every situation because you’re hiring them to manage the property and run your business. So, you know, usually a 300 to $500 maintenance limit is good. And, you know, make sure they give you photos of what’s been fixed. And that’s usually a good bell weather that they’re a transparent company as well. So something to look for. All right, number six is do you inspect the property regularly? You want them to go in at least annually, provide a good report with photos and action items of what they’re looking to do and just understand what the inspection covers. Most inspections are more of walkthroughs in the management space. You know, a home inspection is usually $500 gave or take. So, these annual walkthroughs are not necessarily home inspections. They’re more, you know, checking kind of visually, making sure there’s no damage, making sure the tenant isn’t compliance, things like that. But you might ask them, make sure they do it and make sure that you get a report and kind of see what that report looks like is usually a good idea. All right, number seven, what are your fees? So, I believe fees should be tied to important management benchmarks or goals. So, if the manager performs well, they should earn a commission and commission. It’s like oxygen for a business. And so what I’ve learned is that when commission is tied to something like a performance model, it usually gets more focus. So, I don’t like flat rate companies that, you know, $100 and X dollars or whatever, $200 a month. Because there’s no incentive for them to raise the rent. Whereas if it’s a percentage management fee, when you get paid more, they get paid more. So, there’s more incentive to keep the rent at market competitive. Another common fee is leasing fee. You know, I want my manager to be hungry, to lease the property, to a great tenant. And so, leasing fee usually ties performance to that result. What I’m looking for, if it’s often included, it’s just kind of another step. Again, there’s no oxygen in that system for the company, no revenue. And so often it won’t get as much attention. And same thing with the annual inspection, you know, when this is just rolled into a management fee, oftentimes it falls behind and it’s not given that proper attention. So, those are three things that are important to me. When I’m looking at a management company that you should also consider. And lastly, on fees, just realize that most companies in San Diego, they wash out to about maybe $25 to $75 a month difference. And management fees are tax deductible. So, you know, you figure a 40% tax bracket, let’s say. There’s a $50 difference between company and company B. After taxes, that difference is about $28 roughly. So, you know, there’s not a big difference. So, make sure you go with the company that you feel is going to actually do the best job and be a good manager, not just a messenger, and make your life easy. So, that’s some things to think about. Alright, number eight is, is there ever a fee to cancel pretty straightforward? Look for maybe a month-to-month agreement or a one-year contract, month-to-month. After that is very common. And you want to know if there’s any fee if you decide to cancel, sell the property. Also, look for automatic renewals, some contracts, just renew automatically for a year. So, just be aware of that. Number nine is, what will the property rent for? This is something everyone’s going to give you a rental analysis when you look for companies. But what I look for is a very specific number backed up by data. Anyone can say it’s between 2000 and 2500. Okay, well that doesn’t show me exactly what it’s going to rent for. I want to see about a 10% range. And I also want to see data behind the findings. So, look for those things. It shows professionalism. And lastly, what do you estimate all spending maintenance costs the first year? I love this question because 80% of problems between property owners and management companies are generated because expectations are not met. So, this just gets you right on the same page with the management company. No matter what they say, it just helps you understand what’s how they think about repair costs. So, if it’s vacant, you’re going to want kind of an idea of what you need to do to get it rent ready. And they should be able to give you a rough estimate without even signing up of what that might cost. And there’s things you might not think about like smoke alarms, you know, reaking the property, maybe curb appeal. So, you want to get each manager’s kind of take on what you might need to do and the cost associated with that. And then ongoing maintenance. A lot of companies don’t talk about this, but there will be ongoing maintenance costs. And so, you should budget accordingly. This is just going to make your life a lot easier. And when a repair comes up, you’ll be prepared for it. For instance, a 10-year-old house or newer, maybe budget just 3% of the rent annually. Each year goes into an account. That way, when something comes up, you can pay for it. You know, and that can go up to maybe 12% for a 50-year-old house. If you’re somewhere in the middle, maybe 20-year-old house, 5%. You can be as conservative as you want. The idea is that you’re prepared and you’re setting aside the money that doesn’t always mean you’re going to spend that money. That’s not money. Some years, you may never spend that money and then you might spend it all in year 3. But just a good way to set yourself up for success. So that’s it. Four easy steps to hiring a San Diego property manager. I’ve dropped a link to the checklist. Please download it and hopefully it will help your job make it a lot easier. Thanks so much for watching.