Owning a rental property can be extremely stressful. However, investing in a rental property can be very beneficial as this can build your wealth, but only if you know how to manage them properly. Rental properties will require your time and effort before you can experience its benefits. Also, this can be challenging if you’ve never managed rental properties in the past. This remains true if the rental property that you own is in another city or state, making it that much more difficult to manage it yourself.
That type of stress can be quite harmful longterm, which is why we suggest you let a property management company handle the job for you. Property management companies are made up of trained and experienced professionals who have in-depth knowledge of managing different types of properties. This means that regardless of the type of rental property you have, the target audience you want to reach, and the goal you want to achieve in your investment, there will always be a property management company that suits your needs.
But what if you don’t know how to choose a property management company? How can you make sure you find someone who will care for your property the way that you do?
We’ve got the breakdown you’re looking for in this article! Now then, let’s get started!
1. Get Referrals From Multiple Sources
When hiring a property management company, start your search by gathering referrals.
More specifically, you need to get references and reviews from multiple sources to ensure that you’re pursuing the right company for you. When it comes to hiring a property management company, knowledge is always power; the more you know about these companies, the easier it’ll be for you to choose.
Of course, if you have friends in the area who use property management companies, asking them about their experiences is a good idea. That way you can hear an honest review of how a company does business directly from someone you know and trust.
The internet is the next-best place to search for potential property management companies. Google Reviews, in particular, do a great job of ranking companies in your area, allowing you to scout them from the comfort of your own home. You can also check reliable online sources, such as Console Nebula, to know how property management companies work and how you can identify reputable names in the market today.
2. Confirm Each Company is Licensed and Insured
Let’s be honest. When you have people living in your home, things are going to happen.
That’s why it’s important that the property management company that you choose is both licensed and insured, so you can protect yourself and your family.
What property management companies need to have to operate legally differs per state. So do a bit of research on the requirements in your state so you can ask companies about those documents during interviews.
Also, don’t be afraid to ask for copies of any paperwork related to your property management company being licensed and insured. We recommend that you call the Better Business Bureau to confirm those documents are legitimate, too, just to be safe.
3. Interview a Minimum of Three Companies
Sometimes you can get lucky and find a company that you love within the first few minutes of searching.
And while you’re still looking for other options, you feel it in your heart that your search for a property management company may be over.
We get it. You want to trust your gut, as well as get this search over with it. But rushing into a decision is never a good idea, especially one as important as this.
That’s why we suggest that you interview at least three companies before making a decision. You never know, someone may surprise you in person, winning you over and earning the job.
If you want to make the most out of the interviews, make sure to prepare your questions ahead of time. Aside from asking about their experience and credibility as a property management company, it’s also important to ask these companies about their prices and know more about their customer service.
As a potential customer, you should also pay attention to how the representatives from the company treat you. Remember that you’ll be working with this company for long periods, thus you should make sure that you’re comfortable talking and working with them.
While being thorough is a good idea, going overboard with interviews isn’t. You’re only going to overwhelm yourself by doing so, which is why we recommend not interviewing more than 5 companies.
4. Ask About Important Management Policies
Now that you know how many companies you should interview, you may be wondering what type of questions to add during the interview. Aside from those mentioned from the previous points, it’s vital that you know more about the management policies of the companies.
Well, outside of getting a feel for the people you’ll be working with, there are a few things you need to have answered before you leave an interview for the next one.
How is the Tenant Screening Process Handled?
Before you let someone else decide who is going to live in your rental property, you first want to have an understanding of how they screen potential tenants.
Things like background checks and rental history reports are an absolute must if you want to make sure you’re finding good and safe tenants.
How Do Your Handle Vacancies?
All property management companies handle vacancies differently. Some handle the costs of that home during the vacancy, while others may require you to cover all or some of those costs.
Knowing this information is important, as it can help you decide which company (and which deal) is right for you.
What Rent Collection Methods Do You Use?
Tenants are going to be more likely to pay their rent (and pay their rent on time) if they have multiple ways available to them to do so.
If one property management company only accepts certified checks, that’s something that you need to know, as it’s a sign that they may be a bit behind the times.
What Happens When Something Breaks?
We touched on this earlier, but it’s inevitable that something in your home is going to break. And when that time comes, you want to ensure that the issue is taken care of, and fast, so your tenant sticks around for years to come.
Again, each property management company handles maintenance and repairs differently.
Some have in-house guys and preferred companies that they work with. Others want you to hire your own contractors to take care of it yourself.
Regardless, you’ll want to know what to expect beforehand, that way you can decide which plan is best for you and your house.
How to Choose a Property Management Company: A Guide
Well, there you have it! That is a guide on how to choose a property management company!
So, if you’ve never picked out a property management company before, you can use this information to ensure that you make the right choice for you!
Remember, the screening process is the most important aspect of your search. Take your time vetting potential candidates interview 3 to 5 that you like, and then make your decision.
As long as you do that, and ask the questions we suggested, you should be good to go.
Looking for more creative and innovative ways to earn money? Check out some of our other articles.
