Selecting the right property management company is essential in helping to drive the value of your investment and relieve any unnecessary stress. In fact, not only can it serve as a way to increase your return but can also help to prevent you from losing money and protect you from making mistakes that are almost unavoidable if you don’t have the proper industry knowledge.
And while making the decision to trust a professional team to manage your investment is a great first step; it’s important that you do your research to make sure they’re the right fit. With so many options to choose from, you want to ensure you’re ultimately selecting the right team for you and your property. Choosing the wrong management company can become its own liability; which is why research plays a huge role in ensuring you find the team that’s properly equipped to support all of your management needs.
The Vetting Process
During your vetting process, you want to gain a clear understanding of how your potential team operates. From listing your property to securing quality tenants, develop a firm grasp of how they work internally to determine whether or not it aligns with what you need.
Inquire into whether or not they have a valid property management license as well as what property types they currently and have previously managed. Be sure to also ask for a list of professional references. While it may seem obvious, this is a common oversight that can lead to issues down the road. Better to spot red flags before working with the team, rather than when you’re already months into the partnership.
FYVE Pro Tip: If a company ever objects to supplying you with requested documentation such as a reference or license, don’t move forward in the vetting process. More often than not, they’re more than likely operating illegitimately in some capacity.
Questions to Ask
While there’s no shortage of questions to ask when deciding between multiple management companies, a few important ones to keep in mind include:
- Rent Collection Processes including past due accounts and eviction notices
- Marketing Initiatives around Property Listings
- Screening and Securing Quality Tenants
- Maintenance Requests
It’s not until you ask these questions that you should move forward with initial conversations around fees and general contract terms. While it may not be a high-level discussion at this stage in the vetting process, you want to at least have an idea of whether or not their fees align with your budget as well as understand their overall contract commitment terms.
FYVE Pro Tip: Don’t limit yourself to speaking with just one company. Rule of thumb is to engage in conversations with at least three different options so that you have room for comparison.
Once you narrow down your choices, it’s time to engage in more granular discussions that will lead into negotiations. However, these initial conversations are arguably some of the most important ones as they play a huge role in helping you find the right management company for you, your property and your future tenants.