Rental Property Management Companies are easily found in most major areas. But how do you know which one to hire? We have some tips and issues to consider... which we believe will help you when researching and interviewing which potential rental property management companies would be best for you and your rental(s).
Did you know? Property managers need to be licensed real estate agents. BUT... MOST real estate agents aren't experienced in rentals and the management of them? Unless an agent is experienced in property management and rentals, they WILL NOT know landlord/tenant law well enough to be of real service to you!!! If you hire an agent to find a tenant, are they requiring the right documentation? Are they screening for the best tenants possible? Are they making sure to check for current litigation, liens, bad credit, criminal history? Do they know how to weed out the tenants that are at the most risk of not paying on time or keeping the property in a good, clean condition? There are too many landlord/tenant laws and pitfalls to leave your property to someone inexperienced... it'll cost you big bucks in the long run! Here are some topics to consider:
How strict is the late payment policy? This is important, because you don't want the property manager to come down on a tenant too hard, IF they are good tenants and deserve a break. Why? Because even the best, most reliable tenants may pay late once or twice in a year. And if that's all... it's good practice to give them a courtesy one time late warning without a monetary penalty. The reason? Good faith. Show them you appreciate them as tenants, and they will most likely respond in kind. REMEMBER... YOU as the landlord, WANT your tenants to stay more than a year if possible. This is the most cost effective way to handle your tenancies. Otherwise, paying real estate commissions EVERY SINGLE YEAR can cut deeply into your rental profits.
Remember... your property manager/real estate agent and most rental property management companies will most likely prefer to have a new tenant every year because they make more money in commission that way. If they have your best interest in mind, they will try to KEEP the tenant in place for at least two years. One effective way to do this is to keep a good rapport with the tenant. One courtesy notice of late rent without a penalty is a good policy.
Did you know? Unless late fees are designated in the lease as additional rent... it is VERY difficult to collect that money in evictions or from a court ordered final judgment or claim from security once the tenant moves out. Why make it difficult? Leasing verbiage should proactively address all of the most common future pitfalls... like collecting on late fees! It's VERY important to hire a property manager that knows landlord/tenant law!
What's your policy on tenant's maintaining the AC system
It shortens their life significantly. Coil cleanings range from $250-$600. Also leads to clogged drain lines and other issues. Replacing AC systems are THOUSANDS of dollars.
Does YOUR property manager provide new tenants with a new AC filter, write the size on their lease so they know what to buy in the future, and show them HOW to install it? Do you know the #1 tenant repair request is due to ACs not cooling... and that's because tenants don't change or clean the filters as needed? Your property manager, at move-in, should be explaining the importance of changing AC filters once a month. The lease should ensure that any repairs due to filthy AC filters will be paid for by the tenants. 99.9% of leases do not! And yet, filthy AC filters are THE NUMBER ONE cause of repairs in rental properties... it causes leaks and shortens the life of the AC unit by YEARS!!
Only a very experienced property manager will know how to protect you from huge expensive unnecessary pitfalls like dirty AC filters! And there are MORE preventative maintenance initiates just like this one that the best managers employ!
Will your rental manager be honest with you... and tell you when your rental property isn't in a condition that will attract the best quality tenant? Will they be able to easily identify the most cost effective, cheapest things to do in your property to ensure you're attracting the best quality tenant possible - with a quick ballpark figure of costs... because they do this every day, all day, and have done so for many years? Do they have the painters and handymen and contractors working with them that will give you the best possible rates and be the most responsible?
All rental property management companies have different policies regarding renewals. Most charge another full month's rent or 10% of the annual rental income for a renewal, just as they did when the tenant first moved in. Others charge a flat 1/2 month's rent to keep the tenant in place for another year. Still, other companies don't charge anything for renewals, recognizing that their job is to help you (the landlord) maximize your rental income profit, and will only charge the normal monthly management fee as every other month. Make sure to ask this question to any property managers you are thinking of hiring.