You’ve decided that you need professional property management services for your investment property. And you can almost feel the relief of being able to hand off the landlord tasks to a pro. But first, you should know what to look for in a trustworthy property management company.
How can you find a company that will do what they promise, keep you in the loop, and remain professional, so you can actually have fewer hassles, not more? Here are five key characteristics of ethical, trustworthy companies that will protect you and your investment.
- Open Communication and Reporting
Your property manager should provide you with easy access to all contracts, lease agreements, expenditure reports, and any other documents related to your rental property. Selecting a tech-savvy property management company that offers secure, online access to your documents with real-time updates will allow you to check in on property activity anytime. Responsiveness is also key. When you contact your property manager with questions or issues, you should get honest, prompt answers.
- Transparent Contracts
The managment agreement should be clear and easy to understand. And the property management company should be willing to clearly outline what services are included and anything that would be considered extra, so there are no surprises. A trustworthy company will also willingly go over their process and proceedures for handing each stage of the leasing cycle so you can ensure you’re comfortable with the way they work.
All fees for the property management services in your contract should be clear and established before you sign any documents. You can expect to pay a monthly management fee, as well as a leasing fee, if the property management company will be responsible for finding tenants for your investment property. Typical fees are 7 percent to 10 percent of the monthly rent for management and 70 percent to 100 percent of one month’s rent for leasing. Be aware that companies that charge lower fees may make up for it by adding fees to contractor’s invoices and charging additional fees for services you assume are included, costing you more in the long run. Also check to see if the company collects fees when the property is vacant or only when rent is being paid.
What kind of experience does the property management company have with properties that are similar to your rental property? How well do they know the market in your neighborhood? Any property manager should be licensed or certified as required by local law. And a company that values continuing education and training is most likely to stay up on current best practices and new laws, allowing them to successfully manage your investment property.
Property management companies should be able to provide you with multiple references or a list of addresses they manage. These references will give you a good idea about the strengths and weaknesses of the company and a feel for the types of clients who hire the company. You can also drive by a few of the properties to see if they look well maintained.
The feedback you get from references, along with other information provided by the company, should make you feel comfortable about delegating the management responsibilities for your property. If you aren’t comfortable, keep looking. Trust is key to creating a sucessful relationship with your property manager and a positive investment experience for you. These links offer more in-depth information on interview questions to ask during your search and ways to create a successful relationship with your management company.