How does a property owner hire a property management company to manage an apartment building? The answer is: VERY CAREFULLY! An excellent property management firm can be the biggest assets that an investment property has. On the other hand, an inadequate property management can be the absolute bane of the investment property’s bottom line. A savvy investor knows that one must choose wisely and research well before a contract is signed.
So how does a property owner find, screen and ultimately select a quality property management company? To begin, we recommend putting together a list of 5 or 6 management firms who operate in the area that the investment property is located. Half of this list should be comprised of companies who were referred by a friend or colleague; and the other half should include property management companies with the best customer or tenant reviews on Yahoo! Local and Google Places. A diverse prospect pool will enable the Owner to see the many different attitudes and approaches that are available in the apartment management community
Once a list has been constructed, it is time to conduct phone interviews of each company. We have put together a list of 12 questions to consider during the interview process, which will be posted in sets of (2) over the next few weeks.
Property Management Company Interview Question #1
What does the property management company charge for management services? Is there a leasing fee? Is there a start-up fee? Does the company have a per unit minimum dollar amount?
Property managers generally charge a monthly fee of gross or scheduled monthly income and may have additional administrative charges, travel time, advertising costs, postage and shipping cost tacked on. Each management company’s fee schedule will vary, depending on the city and state.
Shameless marketing plug: Generally, First Light Property Management DOES NOT charge our clients for anything except a flat monthly percentage fee. Beware of a property management company that nickel-and-dimes you to death.
Property Management Company Interview Question #2
This one is more of a test than a question:
When you first call the property management company to discuss its’ services, does a LIVE, pleasant, person answer the phone? If a decision maker of the company is not available, does that person politely take your message? Or do you reach an automated system or voice mail box?
Communication with your future property manager is of the utmost importance. If you, as a new customer, cannot reach the company now – how will you be treated when you have an urgent question or issue?
Additionally, the chosen management company must be responsive in a manner of the client’s preference (e.g. email, telephone, fax, snail-mail). An Owner should find a management company that is flexible and communicates in the way that is most comfortable. Some Owners have more needs and requirements than others – be sure to be upfront and tell the property management company about your expectations early on.
Happy Hunting! _Trevor