asking questions | ask a property management company

15 Questions You Must Ask A Property Management Company

Hiring a property management company is a major decision. Property owners need to make sure that they are entrusting their investment to the right people. Before you sign the contract, here are important questions to ask a property management company.
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Important Questions to Ask a Property Management Company

With so many property management companies today, finding the right one can be very overwhelming for property owners. The following questions for property management companies are important because they will help protect your investment property.

 

Qualifications and Experience

 

1. Are you licensed?

licensed | ask a property managerProperty owners should not do business with an unlicensed property management company. In the state of Florida, property managers are required to have a real estate broker license. This is because property managers engage in real estate activities such as renting and leasing, as well as collect commission. You can also double-check this information on the Florida Department of Business and Professional Regulation’s Licensee Search website.

Moreover, you can ask a property management company if they have certifications, which helps establish their expertise in the industry.

 

2. How many years of experience do you have?

Lack of expertise is one of the main reasons why property owners decide to hire a management company. Thus, you want to make sure that the company you are interviewing has experience in the property management industry.

Ideally, you want them to have at least five years of experience. This is enough time for them to have established a track record. This also means that they have been exposed to a wide variety of property management situations and will know how to handle them.

 

3. How has your business adapted to the changes in the property management company?

Having decades of experience won’t matter if a property management company has not adapted to the changing times. For instance, online marketing is now a big trend in property management. So it’s beneficial to have a property manager who can use social media and other digital marketing strategies to increase tenancy rates and deliver better service to tenants.

 

 

Rent and Tenancy

 

4. How many properties are you currently managing?

Having a roster of clients is a good reflection of a property management company’s capabilities. However, you want to make sure that the number of clients is proportionate to the company’s size. If a company is stretched out too thin, it may not be able to attend to the needs of your property.

 

 5. How do you set rental rates?

When you ask a property manager how they set rental rates, their answer will reflect how much they understand the local market and property management. You want a company that can use their knowledge to set competitive and attractive rental rates.

 

6. What are your average vacancy and tenancy rates?

rates | ask a property managerChoose a property management company with low vacancy rates and high tenant retention rates. This means that they know how to attract tenants to your property and provide a level of service that creates loyal tenants.

 

7. How do you screen potential tenants?

The screening process is one of the important questions for property managers. You want a company that has a thorough screening process. It’s important to perform a background check to see an applicant’s employment status and credit score to see whether they can pay rent each month.

You also want to avoid companies with discriminatory screening practices, which go against the Fair Housing Act. Otherwise, you might get into trouble with the government and end up having to pay hefty fines.

 

8.How do you handle delinquencies and evictions?

Choose a property management company that can handle delinquencies and evictions quickly and effectively. At the same time, their process should be professional and legal so you can avoid lawsuits and complications with the law.

 

Property Management Services

 

9. What property management services do you offer?

Make sure that the services provided by the management company are aligned with the specific needs of your property. Also, ask yourself if you need full-service management that includes administrative, financial, and maintenance services. If you are still planning to perform some of the property management tasks, you might want to consider a company that offers custom services.

 

10. How do you handle maintenance and repairs?

Some property managers will ask you to approve maintenance tasks while others will immediately proceed with repairs. If you prefer the latter, the property management company may ask for a monthly deposit to facilitate the maintenance requests.

 

11. Do you perform property inspections?

Companies may require a small fee for performing property inspections. However, this is a worthwhile expense because it will save you money in the long run. Property managers will be able to address small maintenance issues before they turn into major problems for your property.

 

Contract Terms and Management Fees

 

 12. Do you have insurance?

insurance | ask a property managerHire a property management company that has adequate insurance coverage. At the very least, though, they should have general liability and errors and omissions policies. Having insurance protects both you and the company in case something bad happens on your property.

 

13. How much are your monthly management fees?

On average, property management companies will ask for 10% of collected revenues. However, this may be higher or lower depending on the range of services offered by the company. Nevertheless, it should lie somewhere in the 8-12% range.

 

14. Do you have miscellaneous fees?

Some property management companies offer a low monthly fee but will end up charging you a lot of miscellaneous fees. As such, property owners must be wary of hidden fees. Make sure to clarify with the company which services are included in the base fee and which are not. If they perform extra services, ask how much the fees are.

 

15. What are your contract termination terms?

No matter how qualified a property management company seems, there are other factors that can affect the quality of service that they provide. So if a company is unable to meet the terms of your contract, a property owner must have an option to terminate the agreement — and vice versa. Contract termination clauses usually include reasons for rightful termination, termination fees, and X-days’ notice.

 

Ask a Property Management Company the Important Questions

Going from self-management to a professional property management company is a big leap. Thus, it’s important to ask a property management company all about their experience, the services they provide, and how they will take care of your property. This list of 15 vital questions is by no means exhaustive but it will allow you to cover enough ground to determine if a potential property management company can meet your requirements and expectations.

 

If you are still looking for the best company, feel free to browse through our online directory for property management companies, HOA management companies, and real estate agents.

 

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