Finding the right property manager is a big decision that will have a massive impact on the success (or lack thereof) of your rental business.
After all – these people are going to be your eyes and ears and hands and feet. Their actions will have a huge influence on whether you have a profitable and efficient operation, or a sluggish and failing business.
In my conversations and experience with the property managers in my market, I've found that some of them are EXPERTS who are very good at what they do, and others are total amateurs… the kinds of people you should be afraid to do business with.
When I first got into the business of rental properties, one of my friends (who owns several rental properties in Florida) shared a system with me that he developed for the purpose of finding and screening property management companies. It's a series of informative questions that reveal how capable and competent a management company actually is, and how effective they are likely to be at managing your particular property.
I used these exact questions to find my current property manager and I have to be honest, they worked like a charm. I was able to get a thorough understanding of who I was dealing with before I put them in the driver's seat. As a result of walking into this relationship fully informed, I couldn't be happier with the results.
If you're looking for a property manager and you don't know where to start, I'd suggest contacting a few of them and asking the following questions:
Depending on how many properties you own and what kinds of properties you're in the process of purchasing, you could expand even further on these questions – but in most situations, the information that comes out of this brief discussion will give you some very strong indicators as to whether or not you're talking to a competent property manager.
Some other things you’ll want to be wary of are the terms outlined in the Property Management Agreement. This is a contract between you and your property management company that lays out:
For example, in the agreement that I signed with my property manager, it states that they are authorized (by me) to market the property, screen and choose my tenants, pay for incidental expenses as they come up (up to a specified dollar amount) among other things. This is a very important document because it details exactly what the terms of your relationship will be, and what both parties can expect from each other.