In 2018, landlords received more than $353.7 billion just from rental income! If you’re looking for a way to diversify your income and create a sustainable business that you can run without quitting your day job, becoming a landlord is it.
But like running any business, owning rental properties does involve work. You have to screen tenants, collect rent, and stay on top of maintenance requests each month.
You’re busy enough working and living your life, so how can you squeeze those responsibilities into your already packed schedule? You can partner with property management services. These companies take the stress out of owning rental properties.
However, not all companies are worth working with. Here are a few questions you’ll want to ask before hiring a property manager.
1. How Much Experience Does the Company Have?
As a landlord, you want to make sure the property management company you choose has been around long enough to provide both yourself and your tenants with the experience you deserve.
When you find a company that you’re interested in working with, ask them how long they’ve been around. Ideally, the company should have been active in the industry for at least several years. If not, don’t write them off entirely.
Ask how much experience their staff has in helping landlords like you manage their rentals. Remember, choosing a newer company with staff that has worked in the industry for years can still be a good idea.
2. What Services Do They Provide?
Not all property management companies offer the same types of services. Before you agree to work with anyone, make sure the services they provide match your needs.
At a minimum, you’ll want a company that can handle rent collection, routine maintenance, finding new tenants, and working with tenants that are behind on their rent.
Companies that offer these services and more allow you to step back from the administrative duties associated with owning rental properties. The more services they offer, the less you’ll have to oversee on your own.
3. Do They Have a Maintenance Team?
One of the biggest challenges landlords face is keeping their rental properties in good condition. If you’re doing things on your own, you’re in charge of finding the right repair team or contractor to fix issues quickly.
When you hire a property management company, they can and should handle all maintenance requests your tenants have. However, they should have an in-house maintenance team on hand to take care of those requests as fast as possible.
If the company doesn’t have a maintenance team, they’ll be at the mercy of contractors’ schedules. That means tenants may have to go weeks before problems get fixed, resulting in dissatisfied renters and a potentially higher vacancy rate.
4. How Will They Collect Rent From Tenants?
The days of collecting rent through paper checks alone are long over. However, some companies still limit the ways that your tenants can pay rent each month.
When you’re looking at different property management services, find out how they accept payment.
You’ll want to choose a company that allows tenants to pay rent online and in person. They should accept checks, credit and debit card payments, and automatic bank drafts whenever possible.
This way, your tenants will be able to choose the method that works best for their needs.
5. How Many Properties Do They Manage?
Property management companies often work with many different landlords and manage multiple properties at once. While managing more properties means making more money, it also puts them at risk of overextending their resources.
That means you’ll need to find out how many properties they’re managing at any given time before agreeing to work with them.
Make sure they’ll be able to give you and your properties the attention they need to keep tenants happy and encourage lease renewals. If you think their current management load is too high, don’t take the chance. Keep looking for a company that has more bandwidth to take you on as a client.
6. What Do They Charge for Their Property Management Services?
You own rental properties to make money. The last thing you want to do is to eliminate your profit potential just to work with a property management company.
Ask each service you’re considering working with how they charge for their services and how much they charge.
Remember, you won’t want to choose a company based on price alone. Instead, look for property managers that charge an affordable rate for the highest quality services possible.
You may pay more for better service, but you’ll have a better experience and will likely have happier tenants in the long run.
7. Do They Have References You Can Speak With?
Before you sign a contract and agree to work with a company, you need to make sure they’ll do everything they promise. The best way to do that is to speak with their current and previous property owners.
Ask each company you’re interested in working with for references. Reputable services will have an extensive list of people willing to discuss their experiences with you.
Follow up on those references and see what others have to say. If most of the property owners are still working with the company or would consider going back to them in the future, you’ll likely enjoy working with the property managers.
However, if the references mention concerns or have complaints about the quality of the service they received, keep looking.
Choosing the Right Property Management Company Is Possible
The right property management services team will make being a landlord easy and hassle-free. As you start researching and contacting companies, make sure you ask each one these questions. Pay attention to their answers and the way they treat you as a prospective client.
If the company is respectful and takes the time to answer your questions in detail, you’ll likely have a great experience working with them.
Finding a reliable property manager is just one way to streamline your rental business. Check out our latest posts for more tips to help you improve your profits and keep your tenants renewing their leases each year.