Text of 10 Questions You Should Ask Before Hiring A Property Manager
1. 1. Are you licensed in Colorado to manage property? Managing property requires a very specialized skill set and very few people have these skills without additional training and practical experience. For these reasons the Colorado Department of Regulatory Agencies requires that all individuals practicing property management not only have a Colorado Real Estate license but also take additional classes teaching the fundamentals of property management.
2. 2. How long has your company been in the property management business? Properly managing a property requires more than just fundamental training, it requires a considerable amount of practical experience. You wouldnt trust your life to a surgeon doing their first surgery so why trust your livelihood to a property manager taking on their first property to manage?
3. This question is a double edged sword too few properties may mean too little experience and too many may mean the property manager may not have time to devote to your property. Certainly quantity doesnt trump quality but too few employees and too many properties is an unsettling proposition. Property managers must not only take care of the administrative tasks of managing a property but must also make on-site visits to inspect the property, review vendors work and build relationships with current tenants. There is no set rule of thumb as a portfolio of 10 retail shopping centers may be less labor intensive than a portfolio of 5 apartment communities. 3. How many properties do you have under management? How many employees do you have working your companys property management portfolio?
4. 4. Do you own rental properties yourself? Its always nice to know the property manager you are working with has skin in the game. It means they believe in property ownership as a way to build wealth and they know from an owners perspective what it takes to successfully manage a property. It also means that you should expect a manager to treat your properties with the same care that he treats his own.
5. 5. How many employees do you have working your company s property management portfolio? Certainly quantity doesnt trump quality but too few employees and too many properties is an unsettling proposition. Property managers must not only take care of the administrative tasks of managing a property but must also make on-site visit to inspect the property, review vendors work and build relationships with current tenants.
6. 6. How often do company representatives visit properties? We hear it said over and over again, regardless of the context, that nothing beats having boots on the ground. You cant give a hair cut through the mail and you certainly cant properly manage a property sitting in an office.
7. 7. How are property maintenance issues handled? After hours? The second largest expense a property owner has after the mortgage is property maintenance. It is important to know how vendors are selected and what their relationship is to the property management company. Also, what is the procedure for after hour emergencies? Property management is a 24/7 business and maintenance services must be available to meet needs any time of the day.
8. 8. What accounting and reporting procedures does your company have in place? As the owner of a property, you need to be able to understand your financials otherwise it can be difficult to gauge the status of your investment and whether the property is being properly managed. Ask to see a sample of the accounting reports your property manager will be compiling for you before you sign on and make sure they are simple, straightforward, and provide you all the key data you need.
9. 9. What are the fees and other cost associated with property management? As the saying goes, You get what you pay for, and property management is no different. Ask yourself why a property management firms fee is higher/lower than others in the industry. Truly, it comes down to manpower devoted to your property. If a firms fee is too high, perhaps you are paying for services you dont need (or think you dont need) and if they are too low you definitely wont be getting the level of service your property will demand.
10. 10. Does your firm have a property management agreement? Unfortunately the days when people could do business together based upon a handshake are over. Owning a property is like owning a business and your affairs should be handled in a businesslike manner. Request and review the property management agreement as this contract is the basis of your relationship with the property management company.