Top 10 Questions to ask when searching for a property management company.

1. Are you the Licensed Real estate Broker / Property Manager who will be looking after my property and if not, who is?

Sometimes, a Business Development Manager or Manager will facilitate the initial discussions with you about managing your property. *Try to bypass this person.* When you meet with them or talk to them over the phone, you want to make sure that you know exactly who is the licensed Real estate Broker that will be looking after your property and responsible for your funds. Also arrange to meet with or talk to the Broker to learn more about that them prior to committing to the agency.

You should be looking for a Property Manager that has demonstrated longevity in their role and proves this is a career for them. Due to the stresses of Property Management, turnover is high and you want to try to ensure that you will be talking to the same person in six months’ time.

*In Tennessee it is illegal to manage real estate or do any transactions with real estate unless you are a licensed Broker or the property belongs to you personally. If they cannot produce a copy of their licenses “RUN”!

Be sure to raise the following questions:

How many years have you been working in real estate?
How many years have you been with your current agency?
2. How many properties does the company currently manage?

Naturally you will want to go with an agency that has a reputation for being great Property Managers. That having been said, you need to ensure that they are not too overloaded to look after your property carefully.

As a general rule, you don’t want your Property Manager to be currently looking after more than 400 properties. You don’t want to be lost in the masses. If you have 1 to 10 homes out of over 1000 you become more of a number than a client.

3. How many tenants on your books are currently in arrears and what action do you take if a tenant is behind in rent?

Ask the Broker to outline the company policy for ensuring that you will be paid what your tenant owes you.

• How often will your money be paid into your account?
• How do they collect the rent from the tenant?

Your Property Manager should also clearly outline their policy for what happens when a tenant falls into arrears.

4. What happens if my property needs some urgent maintenance?

Many agencies will have a list of preferred contractors to deal with emergency situations for your property and will organize quotes and co-ordinate required works to a pre-arranged financial limit.

Make sure to discuss this with your agent to ensure that you are comfortable with the process.

Be sure to raise the following in conversation with your Property Manager:

Are you able to pay for property bills on my behalf if required?
When will you contact me if there is a maintenance request?
How will you contact me?
5. What methods would you use to market my property and attract tenants?

This is an important question to ask. The last thing you want is the agent handing out your keys to prospective tenants and allowing them to view your property on their own.
Instead, your Property Manager should be present at the property whenever a prospective client is inspecting the property. They should have a clear marketing strategy in order to find a qualified tenant for you.

Ask your agent how many days they are available to show the property to interested tenants and how they intend to advertise your property.

Some examples of what you are looking for are:

• Online listings on websites such as realtor.com or the local MLS Mutable listing Service
• A professional “For Lease” sign at the front of your property
• Email blast to past and current rental database
• Advertising within their agency and offer commission to other local agents

Here are some important questions you don’t want to forget to ask:

Do you hand out keys to prospective tenants or have licensed agents attend each property inspection?
Do you have agents available to show my property to prospective tenants six or seven days a week?
6. How do you screen tenants?

It should go without saying that a Property Manager will do their best to personally analyze potential tenants. This needs to include utilization of a subscription to a major tenancy database and careful screening of tenants. Assuming they are present when the interested tenants inspect the property, this is a great starting point for them to assess their suitability.

When interviewing your prospective Broker / Property Manager on their screening process, make sure they address the following question:

Do you have a system for checking prospective tenants with regard to credit worthiness, past rental history and current employment?
7. How many inspections per year do you carry out and at what cost?

Start by asking these questions:

How often do you inspect the property?
How much the cost would be for the inspection?
Will you provide me with property inspection reports?
What will be included in the report?
Maintenance issues?
When tenants are vacating how do you handle the move out?
8. What is the full cost of management? Please detail all possible costs and fees.

Unlike the fees associated with selling a property, there are many ongoing fees that are presented when appointing a Property Manager.
The 3 basic fees you will occur are:
• Management fee (a commission percentage of the monthly rental figure)
• Tenant placement fee (often 1 months’ rent)
• Maintenance fee (a monthly fee for administration)

Ask the Broker what each fee includes, as it will often include the advertising of your property to find a tenant, monthly accounting, disbursement of funds, coordinating between tenant and subcontractor to establish dates and time for work to be done, and fallow up on quality of work performed by contractor.

9. What is your estimate of the monthly rental potential of the property?

When your Property Manager answers this question, you should follow it up with “what are you basing this on?” Here, the agent will need to demonstrate a good understanding of similar properties in your area and the current rent they are achieving – both from their agency and others.

Be sure to ask:

What are you basing your estimated figure on?
What are tenants in similar property in the area paying currently?
10. How can you ensure me your looking out for my best entrust and my property?

Property management is not just about collecting the rent. It is a comprehensive management service which should be provided by a trained and licensed Broker / property manager. At times you may come across large management firms that also sell whole sell or turnkey properties. You will find that the management company is just a sideline to keep investors close until they feel you’re done or incapable of future purchases. Then you will be pushed back to longer wait times for tenants, less quality tenants, higher evictions rates. Due to the fact they are giving more attention to owners still buying or keeping their own properties filled with the better qualified tenants. Don’t ever compete with the property management company you hire for tenants!

In asking this question, it allows the Property Manager to explain what differentiates them from their competition and what their strengths are.

Be sure to ask.

How many properties that you manage belong to you or the firm?
Are you affiliated in any way to a wholesale / turnkey firm?