Finding and hiring a suitable property manager may seem like an uphill task for many, but that doesn't have to be the case. Finding the best candidate just requires doing the proper research and knowing the questions you need to ask.
Making the choice of working with a property manager means getting into a long-term business relationship. It's therefore very important that you pick a management company that you are likely to get along with.
To do this, you need a thorough screening process that will help you find out which management company stands above the rest.
In this article, we've prepared a summary of some of the most important questions you need to ask when interviewing companies to manage your property.
Questions to Ask a Property Manager
1. Do you have an insurance policy?
This is perhaps one of the most important questions to ask. If you trust your Orlando investment property to a management company, you need to know it’s in safe hands.
However, accidents and unforeseen circumstances may sometimes occur; but if the property management company has an insurance cover, you would at least receive some compensation.
2. What happens if I cancel our contract?
It is always advisable to understand the terms of a contract before agreeing to it. Part of that involves understanding the repercussions you might face when you cancel or fail to fulfil your end of the bargain.
This puts you in a better position to minimize your losses in case you decide to opt-out of the contract.
3. How do you decide on the rental prices to charge?
This question will provide some insight into their rental pricing strategies. Ideally, your property’s rental price should be competitive with the market prices. If the price is too low, you risk not turning an adequate profit. If the price is too high, you risk having vacant units.
4. What methods do you use for collecting rent?
Rent collection is one service offered by property management companies that provides you with undeniable convenience. This process can sometimes be stressful and time-consuming, especially for landlords who own multiple properties.
By asking this question, you get to understand the company’s level of efficiency. The method of rent collection determines the level of security and the time frame in which you'll receive your rental income. Ideally, the methods used should be as automated as possible with alternative options for tenants who may not have access to the preferred system.
5. What do you charge for your services?
The services you receive from a property management company will come at a cost. Some companies charge a flat rate, while others charge a percentage of the rental income. Others have a hybrid price structure.
Each of these options has its pros and cons which could affect your bottom line. You need to understand the pricing structure so you can select what works best for you.
6. Are there other additional fees?
For the effective management of a property, there are a number of services that may require additional fees. Such services include tenant eviction, property maintenance, tenant placement among others.
You need to understand how much cost you would incur to decide if you’re comfortable working with this management company.
7. What are your rates of lease renewal and tenancy turnover?
A lease renewal rate shows whether the tenants are happy with the company’s style of management. On the other hand, a tenancy turnover rate indicates how often people vacate the property for one reason or another.
Ideally, the tenancy renewal rates should be higher than the tenant turnover rates. If the turnover rates are higher than the renewal rates, you may want to reconsider working with that company. A high tenancy turnover rate translates to a high rate of vacancies, which would affect your rental income.
8. What are your current vacancy rates and the average vacancy period?
The company’s overall vacancy rates need to be low. Vacancy rates are an indicator of a property’s competitiveness in the rental market.
The vacancy period also needs to be balanced. If the properties stay vacant for over a month, then the rental prices charged by the management company are too high. If the properties are occupied immediately, then the prices might be too low, and this would affect your rental income.
9. Do I still have to pay the management fee if my property is vacant or if you fail to collect rent?
Some companies may not charge a fee if your property is vacant, but other companies do. You need to clarify this with the property management company so you can know what to expect.
10. How do you market your vacant properties?
The efficiency in property marketing determines how much attention the property gets from prospective tenants. An efficient marketing campaign will effectively reduce the number of vacancies and minimize the vacancy period.
It's important to choose a company that will provide your property with a lot of exposure in the rental market. This will improve your occupation rates and in turn, stabilize your income.
11. How thorough is your tenant screening process?
The tenant screening process determines the quality of tenants you’ll have in your property. High-quality tenants will not only pay their rent on time, but also take good care of the property.
Thorough tenant screening helps to separate high-quality tenants from the potentially problematic ones. It should include background checks on the prospects to determine their character and finances. This will determine whether they're suitable candidates for tenant placement.
12. What are your eviction rates?
The rate of eviction relates to the thoroughness of the tenant screening process. If the screening process is effective, the eviction rates would be low.
In the event that tenant evictions become necessary, you need to know how the company handles them. The more efficient the eviction process, the faster you can find a replacement tenant and protect your income.
Conclusion
When hiring a property manager, you need to gain as much information as you possibly can on their fees, how they operate, and most importantly, their reputation. It is also important to request a copy of their standard contract and read through the fine print.
At State Property Management LLC, we specialize in managing long-term investment rental properties in Orlando, FL. Reach out to us today for premier property management services that will maximize your returns!