A few weeks ago, I wrote a blog post about how to know if a property management company is something that you want or even need. It’s a good read if I do say so myself, and it’s something you should check out before you make a decision.
If you’ve made the decision and the choice is to go with a property management company, then there are a few things you want to consider before you jump in.
Check Their License
The first thing you want to do with any property management company you’re considering is to check their license. Property management companies in California are licensed and registered with the California Department of Real Estate (DRE). Ask to see a license before you sign.
If you’re not sure about whether a company is licensed, click this link. It will take you to the state site that allows you to check on licenses. In case you’re wondering, PMI is licensed with the California DRE.
Ask to See Other Property Listings
One of the benefits of a property manager is he knows the market. You want one that’s a local expert, which means he’s leased a home in the same city that your property is located in. A city like Beverly Hills has different rules than Los Angeles and it caters to a different market.
Before you make a decision, ask what kind of properties the company is currently managing in your specific city.
Ask for References
Sometimes you can find these on a website, but it’s also good to ask the property manager as well. Ask for a reference or two so you can get a feel for a property manager. You can also search review websites like Yelp, to determine if the property manager does business in a way that you agree with.
These references will help you become more confident in your decision.
Ask About the Process
Licensing and references aside, there are questions that you can ask that test the knowledge of a property manager. Ask about property inspections, how they screen their tenants, what they do to search for tenants, and what they do when it comes to property repairs. These are important questions to have answered and you need to feel comfortable with the answers if you’re going to have this person manage your property.
Ask About the Fee Structure
It’s a given that you’re going to pay this person to manage your property, however, there are fair ways for a property manager to do business and not so fair ones. It’s important you ask the right questions before you sign on the dotted line.
Ask if there are terms and conditions that come along with the fee structure. Ask if there’s a price difference between a long-term property management contract and a short-term one. Ask if there’s a probationary period. Ask if either party can break the contract at any time. Ask if there’s an early termination fee or a mark-up on maintenance.
Whatever the answers to these questions are, make sure the answers are in writing in the contract you sign. If the two of you agree to an adjustment to the contract, make sure that’s in writing as well.
Ask for a Second and Third Opinion
Never interview just one property management company. Make sure you speak to two or three property management companies before you make a decision. It’s no good hiring a property management company quickly, only to have to fire them or fight your way out of the contract three months later.
While finding the right property management company up front may take some extra time, the peace of mind that comes with it will last for years to come.
If you have any questions or thoughts feel free to reach out at any time.