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8 Questions to Ask Before Hiring a Property Manager

Juan Martinez • August 25, 2021

Do you feel like it's the right time to hire someone to manage your property? Hiring someone to manage your assets can be a daunting task, especially if you're a new landlord. However, the right manager can considerably boost the efficiency of your investment property. Maybe you have no idea what makes the best property manager, but you know your objectives. You want to make sure that you choose the best person for the job.

How can you make sure you hire the ideal property manager? While there are numerous qualified property managers in the market, it's essential to find a person whose skill set matches your asset's exact needs. Read on to learn the right questions to ask before hiring someone capable of managing your investment property.

1. What are the Rates of Your services?

The first question that should pop up before hiring the services of a property manager is the rate charged. Now, different property managers will have varying charges. Expect different rates throughout your hiring process. Some people will offer a percentage of collected leases, while others will request a flat fee regardless of whether the unit has a tenant or not. You need to evaluate the total income your investment will generate and still give a good return on investment after paying the property manager's fees.

You need to ask yourself what the average management rate is for rental properties. The property manager's fee is usually between 4% and 9% of the asset's monthly income. Generally, it depends on the property manager and the type of property. The key here is to choose an ideal manager that will provide a reasonable rate for the services rendered.

2. Are there hidden management fees?

Certain property managers offer low upfront management rates that seem too good to be true. Some managers add on hidden charges such as maintenance markups, tenant finder's fees, evictions, maintenance reserves, and other fees. Make sure you examine the fee structure properly to clear all expenses you may incur. The job candidate should outline the management rate structure in the contract to avoid any misunderstandings later.

3. Can the Management Contract be canceled?

Investment property owners often find themselves locked in an indisputable management contract. Before hiring someone to manage your asset, you need to review their agreement cautiously. You need to ensure the property manager's responsibilities are indicated in the contract and you understand them. You also need to understand the manager's responsibilities and yours to ensure you're protected if the manager fails to fulfill their duties. The agreement ought to spell out if you can cancel the contract and on what basis.

4. How do you Screen Tenants?

One of the main reasons for hiring a property manager is to increase the efficiency of your investment property. The quality of the tenants occupying your property may determine the profit you make from the investment. You require potential tenants if you desire to enjoy your investment property. Choosing tenants is one of the most important parts of renting a property. Your future property manager should follow a thorough screening procedure to prevent future disputes and headaches.

The property manager should detail down the screening process they will use to choose a prospective tenant. Does the manager confirm the applicant's employment history? What documents are the applicants required to submit? Does the manager look into the tenant's criminal background? Is the manager aware of the tenant-landlord laws like the Fair Housing Act? An ideal property manager should conduct a proper screening process in your absence.

5. How is Rent Collection Handled?

Tenants are very crucial in attaining a return on investment for your property. You want to look for an ideal manager that knows how to handle rent collection diligently. Does your property manager require occupants to drop cheques at their office? If they do, it's good to keep on searching for the right manager. Dropping cheques off at the manager's office might have been the best rent collection method in the past. However, times have changed, and there are perks of modern technology to smoothen the running of businesses.

You want a property manager who will utilize online rental payment services to lessen occupants' chances of missing rent payments. Online rent payment platforms are more appropriate for the tenants and speed up the rate at which you receive your money.

6. Are you a Licensed Property Manager?

In many states, property managers require a license to perform real estate activities such as managing investment properties. A licensed manager is cleared of violations like extortion, theft, and forgery. A certified property manager has undergone real estate training and has all the knowledge to turn your investment into a successful one. Before hiring a manager, ensure they are licensed by the relevant authorities to avoid being a victim of extortion and theft, leading to unexpected loss. Ask for a property management license to hire the right person for the job.

7. Do you have any experience in Property Management?

Property management isn't a sector where you can use bootstraps to pull yourself up. Investment property management requires expertise, and hiring an experienced person can relieve much of the struggles of starting as a landlord. It would be best to ask the prospective property managers how long they have had experience in the industry. How do they handle challenging situations? Have they dealt with utility, maintenance issues, and renters' disputes? Make sure the ideal manager has proof of successful years of skill.

8. How do you Submit Reports?

A property manager has to prepare annual and monthly financial reports for the landlord. A good manager will go above and beyond to make the statements easy to read and understand. The report should contain detailed information regarding every activity, such as repairs conducted and rent collected on the managed property. Before signing a contract with chosen prospective managers, ensure you ask for a sample report to verify that their manner of reporting is appropriate.

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What Does a Property Management Company Actually Do? Behind the Scenes Look

November 26, 2024

A lot of people think property managers just sit back, relax, wait for the phone to ring, collect rent, and that's it. My name is Jorge Rodriguez, president of Americana Property Management in Las Vegas, and I want to show you what really goes on behind the scenes in property management. Should You Hire a Property Manager? Whether you own one property or twenty, there comes a point when managing everything yourself becomes overwhelming. At Americana Property Management, we typically help owners who: Own multiple rental properties and can't keep up with all the demands Live far from their Las Vegas investments Want their rental income to be truly passive Don't want to deal with hiring maintenance staff and contractors Can afford to invest 8-12% of their rental income into professional management The cost of property management isn't just an expense - it's an investment in protecting your property and maximizing its value. Let me show you exactly what I mean. How We Protect Your Investment A lot of owners don't realize how much liability they take on when they self-manage. At Americana, we: Stay current with all landlord-tenant laws Use legally-sound lease agreements that protect your interests Handle evictions professionally when needed Document everything to protect you from false claims Maintain detailed records of all income and expenses Take care of tax documentation Most importantly, we act as a buffer between you and your tenants. When there's a challenging situation - like late rent or lease violations - we handle it professionally so you don't have to be the "bad guy." How We Find Qualified Tenants The number one thing is making sure we find a qualified applicant for your home. At Americana Property Management, we market homes on over 50 websites, including: Zillow Trulia Realtor.com Apartments.com We also list properties on the MLS and work with other realtors to show our homes. We've found that applications from realtors tend to be better because the realtor pre-qualifies them before showing homes. Our Tenant Screening Process When we receive applications, we put them through a very strict verification process: Background checks Credit checks Rental history verification Employment verification Reference calls We want to make sure the person we're putting inside your home is going to pay rent on time and take care of the property. This verification process is vital to successfully managing your property. Once we complete the verification process, we always reach out to the owner with our findings and get their final approval before moving forward. The Move-In Process Setting Up the Lease We draft up a landlord-friendly lease agreement that protects everyone involved - the owner, the property management company, and the tenant. This gives us a legal binding contract that we all must abide by, preventing any misunderstandings in the future. Move-In Orientation Other property management companies might call this a move-in inspection, but we take it a little further. We: Document the condition of the home with pictures Demonstrate how the home functions, including: Where to shut off water if there's a leak How to reset breakers How to reset a GFCI How to relight a water heater How to change filters How to change batteries in smoke detectors and thermostats Ninety-five percent of work orders are very small and something the tenant can take care of. By showing them how during the move-in orientation, we save our owners money on unnecessary maintenance calls. How We Handle Day-to-Day Property Management Rent Collection We make sure rent is collected by the first of the month. Tenants have until the third to pay with no late fee - that's their grace period. On the fourth, they're charged a 5% late fee. If a tenant still doesn't pay rent, we start serving legal notices and ensure we follow through on our collection efforts. Maintenance and Repairs Tenants can submit work orders through our online portal - the same place they make rent payments. When we receive a work order: We inform the owner We dispatch our vendor to diagnose and repair the issue If the cost exceeds our approval limit, we contact the owner so we can make the right decision together Our vendors provide us discounts because of the volume of work we give them. These savings get passed on to our owners - you're getting highly qualified vendors for less than what you'd pay finding someone through Google. Working with Home Warranty Companies If you have a home warranty, we handle everything: Filing the claim Coordinating with the tenant Making sure the vendor goes out Following up to ensure everything is working properly HOA Violations If your property receives an HOA violation: For tenant-caused issues: We contact the tenant and ensure they fix the violation For owner responsibilities: We communicate with you, get bids if needed, and help choose the right vendor to resolve the issue How We Save You Money with Our Vendor Network One of the biggest advantages of working with a professional property manager is our vendor relationships. At Americana Property Management: We have trusted vendors for every type of repair and maintenance Our vendors give us significant discounts because of our volume We only work with licensed, insured professionals We know which vendors do quality work at fair prices We handle all vendor coordination and payment Think about it: When you search for a plumber on Google, you're paying retail prices and taking a chance on quality. Our vendors know they'll get consistent work from us, so they give us better rates - and those savings get passed directly to you. How We Keep You Informed We believe in complete transparency with our owners. Through our online portal, you can: See real-time updates on rent collection Review maintenance requests and approvals Access monthly financial statements Track property performance View all property-related documents Every month, you'll know exactly: How much rent was collected What maintenance was performed Any upcoming expenses or needs Your property's bottom line We take care of your property like it's our own, and we make sure you always know what's happening with your investment. The Lease Renewal Process We start the renewal process 90 days before the lease expires. During this time we: Compare similar properties to see if a rent increase (usually 3-5%) is justified Inspect the property to ensure it's being properly maintained Review the tenant's payment history We take all these factors into consideration before offering a renewal, and we always get your blessing before moving forward. Most of our initial leases are for one year. This gives us flexibility - if a tenant isn't paying on time or taking care of the home, we can give them a 30-day notice to vacate instead of renewing. However, when we do find good tenants, they tend to stay in our properties between 3 to 5 years. We really try to find long-term tenants so you can make consistent income from your investment. Looking for Property Management? Our main focus is making sure your interests are taken care of. You collect a nice check every month, and we handle all the headaches. If you have any questions about how we can help manage your property, you can reach us at 702-719-2100 or email us at pm@americanapm.com.