Possibly the most important decision in the process of leasing your property, is choosing the correct Property Manager. A good Property Manager can help save you time, reduce stress, save you money and make things run smoothly while your property generates cash flow and increases in value.
If you are like most owners who are considering the option of leasing their home, you probably don’t know much about how that works. When you contact and interview residential property managers you may not know what areas are important to cover and which questions to ask.
The purpose of this article is to give you insight to the home rental process, point out important areas to cover and suggest some questions to ask property managers as you interview them for the job of leasing and managing your home. W cover the most important tasks a property manager is expected to perform for you and suggest specific questions and pointers that may help you in choosing a property manager that is best for you and that is professional, knowledgeable and experienced
Content of this Article includes:
1. Why Lease your Home?
See Article on Benefits of Leasing Your Home.
http://www.rentlist.com/rental-investor/benefits.pdf This is an Adobe Acrobat pdf document and requires Adobe Acrobat Reader 5.0
2. Where to find Residential Property Managers?
Property Management Directories (like RentList http://www.rentlist.com) provide you an excellent opportunity to check out a wide range of Property Managers in a very short period of time. Also search the web using the search words of your city and home rentals or property management. I.e.: Atlanta home rentals or Atlanta property management
Visit Property Management companies web sites. What is the profile of
the property manager?
Does your property needs fit in the profile of this Property Manager? Are the properties on the available rental list in the location, property type and rent range of your property? The web site will tell you quite a bit even before speaking with the property manager. In fact, many owners use the web sites to filter out managers that don’t meet their requirements. Don’t waste your time with them if they are not a good fit.
Another place to find property managers is the membership directory of The National Association of Residential Property Managers on line at http://www.narmp.org In the left column click on membership and then select the chapter in your area for a list of members.
Other sources of property managers would be in the yellow pages under
Real Estate – Property Management, yard signs of managers in your area,
classified ads in newspapers or on the internet. Referrals are a good source
also, so ask people you know if they know a good property manger.
3. What Type Management Companies are There?
Independent Management Companies – These are property managers that are not part of a franchise or a large Brokerage company. Many of the independent management companies do not list and sell homes even though they could sell your home to the tenant if you gave permission. These property managers often say “residential property management is our only business”.
Tip: Quite often you will be meeting with the Owner/Broker of these companies. Find out who will be the property manager and leasing agent.
Brokerage Companies – Many brokerage companies do have a rental department and manage quite a few properties as a service to their owners and in hopes of earning a sales commission when the owner wants to sell the property some day. Some of these operations are quite large and you could get lost in the shuffle. Also they may be just providing property management as a way to inventory homes they may get a chance to sell. In other words, their heart may not be in it. This may be a secondary function and they may not devote the resources needed or have the expertise. This has been my observation.
Tip: Find out who will be the on going contact for you. Comment: You are choosing a property manager not just a property management company. Will you be turned over to a different person in the company after your home is leased? It would be nice to know on the front end who will be updating you or answering your questions down the road. You don’t want to get lost in the crowd.
Independent Agents – Some sales agents manage a few properties as well. Nothing wrong with this as long as they are knowledgeable and experienced and are able to devote adequate time to the leasing and management duties.
Tip: Try to find out if property management is a primary
job for them or just a sideline. What percentage of their business in property
management and what percentage is sales?
4. What to Expect from a Management Company. What are the Services Performed?
Lease only – Some management companies may lease your property
for you and then you take over the management. Not all companies
offer this service.
Tip: You will need management services so go with the full leasing and management service.
Lease and manage – This is the full management service including leasing and on going management. Probably 99 percent of owners wisely choose this option.
The property manager’s services normally include marketing your property for rent including advising the rental amount and what needs to be done to have the property in rent ready condition, advertising, screening prospects, showing, getting and processing a rental application, approving, covering the lease with the tenant in a lease signing meeting, doing the move in inspection, collecting the security deposit and making sure the tenant gets the utilities in their name.
On going management includes collecting the rent, handling all correspondence and lease issues with the tenant, enforcing the lease terms, screening maintenance requests, having maintenance work done, lease renewals, move out inspections, making damage deductions if needed, retiring the security deposit due to tenant. Also issuing your monthly owner statement showing income and expense with your owners check.
These are the basic services. Many other services are performed by property managers like helping with property insurance claims, coordinating termite inspections, meeting appraisers, and more.
Tip: When interviewing the property manager ask when services are included and which if any are not.
Also see: Why do you need a Professional Property Manager
By National Assoc. of Residential Property Managers
5. What are their fees?
Tip: Never select an Agent because he has the lowest fees. Remember that if he gives his own money away readily, then how much easier will it be for him to give away your money and suggest a lower price than your property is really worth. Rather than choosing the lowest bidder, carefully investigate a few competing companies and take time to interview the manager who would be assigned to your property. However fees are important and you need to completely understand what you will be charged.
Fees that management companies charge vary by state, location and even within the same city. There are no standard fees according to the Real Estate Commission but here are the most common types.
Lease or procurement fee – This is a fee to lease your property to a new tenant and is usually charged to your account at the time the tenant moves in. Many times this comes out of the first month’s rent that has deposited in to your account.
Tip: Ask if there is an guarantee if the tenant moves before the first 12 months, then will the manager release for a prorated lease fee?
Tip: Ask what the fee is for a longer term lease, say 24 months, if that is a lease term you are open to.
Lease renewal fee – This is a fee to renew the lease of the current tenant. The property manager may visit the property for an inspection, consult with the owner about a proposal rent increase and send out a lease renewal package to the tenant before the current lease expires. This fee may be a fixed dollar amount of stated in amounts equal to or a percentage of the monthly rent.
Monthly management fee – This is the most common type fee. It is for the on going management of the property and usually includes collecting the rent, move in and move out inspections, handling the maintenance, lease matters, property visits and other services. This fee usually begins when the first tenant moves in and continues monthly. Sometimes the monthly management fee is a percentage of the rent collected and sometimes it is a fixed dollar amount.
Some management companies may have a larger management fee and not charge a lease fee.
Other fees – Ask the property manager if there are any other fees. Some companies charge no extra fees and some may charge all of them. This is the least standard among the fees. Some other fees we have heard about are:
Advertising fee to advertise the property in the classifieds or on the internet.
Improvement supervision fee to oversee large maintenance jobs such as roofing, painting or construction.
Property inspection fee to visit the property and provide a written report.
Some fees that may be charged are not fees to the property manager but fees for filing dispossessory warrants for non payment of rent or a writ of possession.
Tip: Some managers might as well have the nickname “Fee-fee”.
While some of the other fees may be warranted watch out for too many and most
importantly make sure you know what other fees may be charged. Look out for
hidden fees. Ask "are they are more fees I should know about?".
6. How to Check Out a Management Company/ Property Manager
The challenge is to find the right firm and the right manager. Carefully investigate a few competing companies and take time to interview the manager who would be assigned to your property.
Tip: Interviewing the manager who would be assigned to your property is important. Not the sales manager, not the broker, but the actual property manager who will be in charge of your account.
Check all references, and keep in mind these tips and guidelines:
Check some owner references. Ask for three owner references and
give one or two a call.
Tip: Call the ones of out state. They are less likely to be friends, go to the same church or be a business associates, etc of the manager.
Check out their reputation with other managers / agents in the area of your property. Call an agent in the area and ask if they know anything about this management company and see if they have anything good or bad to say. Call other property managers in the area and ask the same question. Tip: If several competitors hint at negative vibes, beware because they probably know the reputation of the manager.
What is their experience? How long have they been in business? How many properties do they manage? Do they own rental property themselves?
Are they licensed? Ask to see the pocket card or license of the property manager. To manage property for others for a fee you need to be licensed in most states. Experience in property management is the most important qualification. How much experience does the manager have managing property like yours?
How many properties does the company manage and have many properties does the property manager personally manage?
What are the type properties (single family homes, condos, duplexes, etc.) and what is rent range of most of the properties they manage and does this sound like your property will fit in to their portfolio nicely?
Look at the manager’s list of available properties and see if the type, rent range and location of the property is similar to yours. Their web site is great place to see this list.
By sitting and talking to the Property Manager representative, you will
gain an impression as to
how knowledge the person is, how active the person is within the profession as distinct from simply doing a job, how well he relates to you personally. Let him give his presentation (if he has one) and then ask some questions.
You could ask some of these open ended questions to see how knowledgeable and confident he is. Property managers need a thorough understanding of the Landlord Tenant laws and should have procedures for handling different situations.
How do you market my property for lease?
How do you handle lease renewals?
How do you handle the damage inspection and return of security deposit?
What if the tenant breaks the lease?
Communication and conflict resolution skills. Rental property owners rely on property managers to maintain good relationships with tenants while enforcing the lease agreement. Does the manager seem capable of this?
Understanding maintenance and repairs. A good property manager will
inspections of the property, ensuring that the property is kept in a good condition of repair. By preparing a proactive, preventative maintenance program, he or she can help owners save money in the long run.
Tip: Ask the manager how he handles repairs and what is the responsibility of the tenant and the landlord for repairs?
Tip: Discuss the approval limit on repairs before the manager needs to call you.
Tip: Ask if they provide any preventative maintenance programs and how do they work?
Skill with financial administration. The property manager’s role includes collecting rents, handling security deposits, accounting for funds, paying the owner.
Tip: Ask the manager what he does if the tenant
does not pay the rent?
When he finishes explaining you should be impressed with his knowledge and procedures.
Tip: Ask when each month do you get your owners
It should be within 30 days of receipt of the rent. By the 10th or 15th is a common time.
How does the property manager feel about your property? Is he negative or generally positive? Is he paying special attention to your situation are just going through the hoops?
By the way, I almost forgot the most important one. Get a copy of the Property Management Agreement and read over every word. It is best to get a copy when you meet with the prospective property manager and read it over after the meeting. Make notes of any questions you have and give the manager a call the next day to get the answers. The Property Management Agreement is between the owner and the Property Management Company and sets forth the duties and responsibilities of each.
7. Are they professional?
How fast did they return your call? This really tells a lot. If it takes days, then look elsewhere. This will tell you how much they want your business. If they are already stressed out with too much business, watch out you are heading for trouble.
Are the presentation materials professional in appearance and content?
What trade organizations are they members of? What professional designation does your property manager have? You obviously want the right blend of skills and experience and a professional designation represents. Have they taken a course lately? When?
NARPM (National Association of Residential Property Managers) is the top organization for residential property managers. They have the PPM designation members can obtain for education and experience and the MPM (Master Property Manager) the top designation.
Also IREM (Institute of Real Estate Management) has a property management coveted designation of CPM, Certified Property Manager
Both organizations provide seminars and educational programs to help managers keep their skills up to date in this fast changing industry.
Character of the Agent/Representative: Do you feel that you can trust
Do you have confidence in the manager?
Do you feel secure in the person that they can lease your property?
Hopefully now you have a better understanding of what is expected of a residential property manager. After meeting with the property manager and evaluating the responses to the suggested questions you will be in a good position to select the manager best for you.
Robert Fowler, Master Property Manager
Owner Moving Checklist – What to do prepare as you move to lease your home.
Should You Rent Your Home – has more questions to ask
RentList.com – Residential Property Managers
WHY YOU NEED PROFESSIONAL PROPERTY MANAGEMENT?
For Single Family Homes
NARPM – National Association of Residential Property Managers
Back to How to Choose a Good Residential Property Manager
1. Professional Leasing and Management
Professional property managers are committed to maximizing the benefits
of your investment through efficient management of
your property; thus freeing you from management problems while providing the most professional real estate services.
Professional property management teams develop strong relationships with real estate professionals and maintenance contractors to provide you the best blend of services.
Professional property managers are dedicated to keeping your investment
in good repair with minimal cost and leasing it at fair
market rates while carefully screening and selecting residents.
Whether contracted to manage the investment of a single property owner, a multiple-property owner, a business professional or a corporation, professional property managers give each client and each property individual attention and care.
Professional property management teams want to make your real estate investment a pleasure rather than burden. They are here to satisfy your property management needs.
2. Personal Service Management
Professional property management companies target the general public
with advertising and promotional campaigns and work
closely with businesses to relocate their employees and families.
Maintenance is supervised by a staff of respected contractors who provide competent service at competitive rates.
Professional property management teams are committed to personal service
thus allowing you to get the most out of your real
estate investment without the day-to-day worries of property maintenance.
3. Relocation services for employees
Relocating employees is a time consuming task and major expense for a business. Professional property managers can take care of all the details for you.
Leasing agents work with relocating employees to help them find new homes before they move.
Professional property management firms provide information about the local housing market, vacancy lists of available properties, and information on schools, utilities and other services of interest.
4. Professionalism you can count on
Members of the National Association of Residential Property Managers,
a national group of real estate professionals subscribe to its code of
ethics and standards of professionalism in property management.
5. Property Management Benefits
Presents your property to the largest available
market, including relocation and corporate transfers.
Stays aware of current market conditions, allowing your property to rent at its highest price.
Computer systems enable us to maintain an exhaustive list of all the features that make your property desirable.
Minimizes your rent loss by utilizing a broad range of advertising media.
Provides you with protection through proper lease agreements, deposit forms, addenda, late notices and other legal
Provides comprehensive tenant screening to assure you qualified and responsible tenants.
Provides qualified and reasonable priced maintenance personnel who get the job done right.
Provides key control procedures to protect you and the tenant against unauthorized entry.
Makes routine inspections of your property.
Handles all communications with the tenants.
Most of all, we give you peace of mind!
Subject: Property Owner’s Moving Checklistby RentList.net
We are providing this checklist to help remind you, the homeowner,
of things to consider as you turn your home
over to a professional property manager to lease and manage. This is a busy time for you and we hope this helps to ease
the burden of worrying about forgetting something and helps to prepare for the turnover.
Some items listed on this checklist may not apply to your circumstances.
These are general items that should apply to most
management companies but talk with your property manager if you have any questions. If you see something we missed that
would be helpful to future owners, please let us know so we may add that item to this list.
___ Utilities – Leave on in your name until the agreed upon date which
will usually be the day the lease begins and the new
tenants move into your property. Discuss this date with your property manager once an application has been approved.
Remember no utility connections are made on weekends.
___ Repairs and Preventative Maintenance – Taking care of repairs
now may be easier and cheaper to do while you
are still in possession of the property. Some items to consider are clean gutters, replace fluidmaster in back of toilet tank,
change air/furnace filters and leave behind a fresh supply for the tenant, repair broken windows, caulk tubs, repair leaky
___ Keys – Your Property Manager will need three (3) sets of
keys. One to retain and two for the new tenants. If you
have no key to an exterior door or you have a separate key for each lock, you might want to have a locksmith re key all
locks to one key. Also be sure to leave the garage door openers.
___ Remove All personal Items from the Property – Owners leaving
behind personal items is one of the biggest and
most common problems in the rental process. Please remove all items from the attic, basement, garage, closets, storage
buildings, etc. The tenant will have his own belongings and needs the space. You won’t be doing any favors leaving behind
things “the tenant may want”. Do not leave the lawn mover or other motorized or sharp equipment, chemicals, broken
glass, etc. You and your property manager do not need the liability. You may leave behind a few cans of paint in case a
touch up is needed, but store them away from the hot water heater or furnace.
___ Cut Grass – It is ideal to have the grass freshly cut,
bushes in a trimmed condition and the yard in generally good
condition when the tenant moves in. If needed, ask in advance that your property manager have this done. A yard in good
condition when the tenant moves in will set the standard for the condition expected when the tenant moves out.
___ Final Cleaning of the Property – After you move out and before
the new tenant moves in, the property will need to
be cleaned. Remember, the better the condition you leave the property, the better the condition the tenant is likely to return
it in. You may be planning on cleaning the property yourself but a professional cleaning service may save you valuable time
so that you don’t run short during your move. Many times the tenant is disappointed in the condition at move in time and
claims the property was never cleaned properly. If it was professionally cleaned, it is more apt to be cleaned to professional
standards and we can tell the tenant it was done professionally.
___ Forward your Mail to your New Address – Stop by your Post
Office and get the form to forward your mail. Best
to do this about one week before you move as it takes that long to get started. Notify everyone including your Property
Manager of your new address. Notify the County and City Property Tax Dept, your insurance agent, terminate company,
warranty company, Homeowner Association.
___ Notify your Property Manager – Keep in touch to advise when
you are physically moving out. Advise of your new
address and phone numbers. The Property Manager may need to contact you regarding a rental application, get your
approval or send you a check!
___ Insurance – Have you notified your Insurance Agent and made
a change in your homeowner’s policy to reflect
___ Warranties / Contracts – Before you leave, provide your Property
Manager with copies of any warranties you may
have and update them on any landscaping maintenance or other contracts in effect. Same with termite bonds.
We hope this checklist has been of value to you.
Copyright Residential Property Management, Inc.