You've decided to let a property manager manage your rental properties, so how do you choose the best one?
You want someone that has your back, is honest, doesn't cost an arm and a leg, and really takes the stress off of being a landlord and managing it yourself. There may be many reasons you're looking at a property manager such as not living close to the property, you simply don't have time, you're unsure how to manage a property well, or you simply of more properties than you can handle on your own. Whatever the reason, when it comes to looking for the right property manager or property management company, there are some key questions that you should ask before signing with a company.
#1. How long they've been in business and how many properties they manage.
A typical property manager can handle at least 10 to 30 properties so we well. Anything more than this and they may need additional help. Ask the property manager or company how many properties they manage on a regular basis and how many people they have to handle all situations, issues, screenings, and problems renters or properties might have. You need to make sure that they have enough properties and have been in business long enough to be able to handle just about any property yet not so many that your property and renters will get neglected.
#2. How do they choose the tenants?
Ask how they choose their tenants and how they screen possible renters. Make sure they are using background checks to prevent you from any huge losses. It only takes one bad renter to turn you off real estate investing altogether. Ask about their track record for handling good renters and how strict they are with regulations, restrictions, and rules.
#3. How do they advertise your property?
A good management firm will be aggressive in their marketing and advertising of your property. The last thing you want is for your property to stay vacant for too long. Ask how they show the property and how often. If they limit how often they show the property or two specific times, you could decrease your chances of getting a good tenant that may have a job with unusual hours.
#4. How much do they charge, what is the fee structure, and how do they go about paying for repairs?
An established property management company will have a good track record of hiring reputable and affordable handyman and repair professionals to tackle any issue that might come up. You don't want to property manager that will lose your money out the window on every little issue, but you do want to make sure that problems that do arise are handled quickly, efficiently, and cost-effectively. Ask about how much they charge each month to manage the property. It's typically a percentage that comes out of the rent each month. A typical fee is between 8% and 15%. Ask about any advertising costs, vacancy costs, and general cleaning on move out and move-in dates.
#5. Does the property management company have liability insurance?
The last thing you want is for some major issues to happen and you be stuck with all of the legal fees. This issue is really important you want to be covered in this business to protect you from lawsuits from renters, tenants, and even the property management company themselves.
If you have more questions about choosing the right property management company or you'd like to ask us these questions, give us a call! We know the Snohomish and King County rental market and have been managing properties for years!