What To Consider When Choosing a Property Management Company

So you’ve decided to look into hiring a property management firm. But what are you looking for? This article provides a checklist. Cost: The first thing every landlord wants to know is “What’s this going to cost me?” Most property management companies charge a percentage of gross rents. This percentage varies from 4% on up to 20%, so you’ll want to compare several companies. The percentage also tends to drop based on how many units you own. Other Costs: Typically, maintenance, repair, landscaping and other expenses are not included in the percentage above. You will want a detailed breakdown of how these are handled. It’s important to get the full picture before choosing a company. Accounting: Some property management firms send monthly statements along with your check for net receipts. Most, however, have gone totally digital, and you’ll have to log in to download your statements. If the company does neither, walk away. They should be taking care of the accounting for you. Repairs and Maintenance: This isn’t as much an apples-to-apples thing, but you do need the information. You’ll want to know what kinds of repairs they handle, whether the repairs are done in-house or subcontracted, and at what threshold they will contact you for authorization. (You would probably want to know if a bathroom flooded and the flooring had to be replaced.) Yardwork: Again, there’s a wider variation in how yardwork is handled by various property management firms, so you will want details. Do they mow the lawn? How often? Rake the leaves? Shovel snow? What do they charge for each of these services? Cash Reserve: A cash reserve is just what it sounds like: money set aside in the case of an unexpected expense. Most firms require only a few hundred dollars. Advertising: Advertising to fill your property is generally another added fee, but at least it’s a rare one. Most property management firms reserve the same advertising spaces every month, so be sure to ask what they are and how long it takes them to fill a property. They should be able to tell you right away. Also, ask how they fill vacancies. Be sure you are not charged for both advertising and filling the vacancy. Evictions: Every property manager will have handled a few evictions, so make sure to ask them about the process and costs associated with evictions. Should the worst happen, you’ll be happy to have an experienced hand on the tiller. Ending the Relationship: What procedures are in place should you decide to terminate services with the property management firm? Is there a fee? It’s always good to address these issues up front. There you are! A handy checklist for interviewing property management companies.