How to Hire a Property Manager for Your Rental
This is one situation where DIY has gone DNR.
Why would you want to hire a property manager when you could very well manage your new rental property on your own?
There’s quite a few reasons, actually.
- Have access to in-depth market information that will help you maximize your profit by choosing the best rental rates.
- Have efficient, reliable systems for collecting rent and keep tenants paying on time.
- Know exactly how and where to advertise your property in order to eliminate vacancies efficiently.
- Are experts at weeding out crappy tenants.
- Will handle both emergency and routine maintenance (and already have all of the vendor contacts they need to do so effectively.)
- Already understand the housing regulations and property laws, and won’t get you in trouble by violating them.
- Allow you to leave the area, knowing that an expert will take care of your property while you’re visiting family, etc.
- Maximize your profitability and your free time, giving you a better ROI than you could receive doing the work yourself and allowing you to spend your day working on other ways to improve your income streams…or just relax.
What’s Involved in Hiring a Property Manager?
Hiring a property manager is actually a fairly simple process. Generally speaking, if you call or email a property manager, they’ll be happy to schedule time for you to interview them and see if you feel comfortable working with them. They’ll ask you a few questions about your property, your plans, and your goals. They’ll answer your questions, and if your property is ready, will arrange to meet you there and check it out. They’ll talk about what repairs or upgrades we think are necessary or appropriate, and how much they think they can get it to rent for.
Once the basics are taken care of, the property manager will send you a copy of their policies and management agreement. You sign it and get it back to them (along with keys to the property) and they take over. The PM will head out to the property, arrange for the repairs and/or upgrades that you and the PM agreed upon, and once it’s up to snuff, they’ll take a few pictures and write up an attractive listing for it.
How Can I Tell a Good Property Manager from a Bad One?
If hiring a manager is the easy part, this is the part that can keep you awake at night or give you nightmares!
The first challenge is finding a reputable one that you can trust with your investment. Google them, find reviews, call local municipality rental departments, attend a local investment club meeting and ask for recommendations, check with Better Business Bureau and make sure they have the proper licenses and insurance. You’ll also want to understand their processes and procedures so that your comfortable with them. Have an attorney that specializes in real estate review their management contract before you sign it. Get a copy of their lease agreement also (Note: some won’t give their lease out upfront so DIY”s can’t just copy it). Lastly, ask for references and contact them!
What If I Already Have a Property Manager and I’m Unhappy With Them?
Sadly, there are less-than-competent property managers in the world. If you need to flip the script and get a manager that takes better care of your investments, any property manager with time for a new property can take over another manager’s lease, but you need to follow the termination requirements in your current management contract. Generally, most property managers require a 30-60 days written notice of termination of contract. This gives your new PM time to get all of the paperwork and other details mentioned above taken care of and have all leases, other documents and funds transferred to them.
If your property has tenants, your new PM will generally handle all of the communication with them, informing them of the new procedures for paying rent, handling maintenance issues, and so on. They’ll also handle all of the communication with your former property management company to make it as painless as possible for you to switch.