If you intend to enter into the rental property market, one of you first considerations has to be: Am I going to deal directly with the renters or will I be hiring a professional property management service to oversee the rental relationship? If you have any qualms about addressing the difficulties associated with other people and your property, you need to hire someone to be your middleman. What should you be looking for in your search for a property manager?
Just like any job, and this is a job and they will be your employee, you should get a complete resume and full list of references. Do your due diligence on your background research. Interview them, other property owners who they manage for, and some of the renters they service. You have a number of significant investments that you will be placing in their hands. You are trusting your property, your reputation, and your investing future to them. This needs to be a serious interview and search, so do not just go by a good friend’s recommendation. One thing that will go a long way to helping you is if they have a good understanding of your local real estate market or if they are realtors themselves.
Take the time to set up a clear contract for the fee structure. Set expectations will clarify your relationship, and help avoid miscommunication regarding charges to you. You can expect to see charges for management include: vacancy fees, set up fees, leasing fees, advertising, maintenance, eviction, reserve fund, late payments, returned checks, and income fees. Seek a clear understanding of the meaning of each fee, when it will be charged, and if there is a process for challenging a fee.
Property management is not just about buildings. The part you are paying them for is how they interact with the people who are in your property. This is the complicated and sticky part. You will have fantastic tenants, people who could be absolutely no trouble at all. You could also have the most horrific experiences that you could possibly imagine. From nonpayment, evictions, pets, children, drugs, the list of people driven issues goes on. Your manager’s capabilities in this area have to be well flushed out. Their responsibilities will include: collecting and settling rent issues, evictions, finding new tenants, dealing with tenant violations and disputes, handling yours and your tenant’s funds, dealing with tenant complaints. Interpersonal skills are a major part of this job and they are your direct representative to the world.
Maintenance and repair management
Your property manager doesn’t have to be a contractor to handle the maintenance of your property, they just need to know a few. Have them give you a list of their contractors and repairmen. Check out some of the work of their tradespeople and look at the lawns or buildings they manage. Are they in good condition, do they look as neat as you will expect yours to look? Ensure there is clarity on any markups over the cost of repairs. Make sure there are clear expectations regarding how quickly tenant complaints are handled and to what level you are to be involved in maintenance decisions.
The transition process from tenant to tenant has to be clear and detailed. Ensure your future property management expert has a very detailed and fixed process for managing the outgoing and incoming tenant inspections. Do they have a full and complete documentation process for identifying and addressing any issues that will arrive in the process? Does your manager have an eye for detail and a driving desire for completion of projects? If they do, you will be a very happy owner.