Owning an investment property can be a solid investment, and provide a steady source of income. However, managing the property yourself can be time consuming and exhausting. Hiring a dependable property manager can alleviate a considerable amount of stress. But how do you choose the right property manager? We’ve got a few tips to help you out.
1. Ask if they are a Licensed Property Manager
A licensed property manager will have taken an approved property management course, and passed your state’s licensing exam. There are two types of licensed property managers: A licensed property manager and a licensed property manager in charge (PMIC). The difference is that a PMIC can run their own company and manage other licensed property managers. The most important reason for hiring a licensed property manager is that they will follow a state-regulated procedure for handling rental income and security deposits.
2. Ask for their References
When interviewing prospective property managers, ask for the addresses of the homes or apartments they manage, and go take a look at them. Are they well-maintained? Would you personally feel comfortable living there? These are important questions to ask, considering the person responsible for these homes could be your new property manager.
3. Ask how Often they File for Eviction on their Current Properties
Finding out how often a property manager files for eviction on their current properties can tell you a lot. A high eviction rate can mean that the property manager does not properly screen rental applicants.
4. Ask how Repair and Maintenance Issues are Handled
Some property management companies hold back a maintenance reserve from your monthly rental income in order to cover minor expenses. However, some will simply bill you for the cost of the repair on your next income statement. Be sure to arrange for a set amount that is spent on your behalf. For example, you may choose to allow letting the property manager spend $300 before contacting you first. If any repairs cost over that, you need to be contacted for approval.
5. Ask them to Sign a Written Agreement that Includes a Termination Clause
Before making any final decisions, get your prospective property manager to sign a written agreement that includes a termination clause. If for any reason you’re unhappy with your property manager, you will want an easy way to end the relationship. Standard agreements typically include providing 30 days written notice via certified mail to the property manager’s business address.