If you’re a real estate investor in the Mid-Willamette Valley area, you may wish to outsource management of the day-to-day tenant and maintenance needs to a third party.
Selecting the right property management company for one of your largest (maybe the single largest) investments is critical. It is important to weigh in all the factors and select a company that will act with integrity, communicate timely, show care and do quality work. Here is a list of topics that you should talk about when you’re interviewing property managers.
1) Property Management Cost
Standard fees in the industry include management fees that are typically calculated as a percentage of collected rent, leasing fees for finding tenants and signing contracts with them and other fees for selective services. Calculate your typical costs for the entire year and include all the fees that the PM company will charge you.
2) Communication Methods
Communication is paramount in property management. When you’re interviewing property managers, make sure to find out how they communicate with clients. Do they use email, text messaging, or phone? What’s their typical response time? Are they available to you and your tenants over the weekend? Do they have a 24/7/365 answering solution?
3) History, Licenses, Affiliations and Reputation
Does the company hold a current license with OREA? Are they a member of the Better Business Bureau? Are they a part of industry associations like ORHA, NARPM and Multifamily NW? How long have they been in business? What do the online reviews say about the company?
4) Advertising of your property
How and where does the company advertise? Do they use just Craigslist and lawn signs or do they have a comprehensive mix of channels employing tens of specialized tenant platforms, social media and targeted email? Do they have a solution that allows prospects to schedule a showing 24/7/365 in order not to miss an opportunity?
How does the company screen prospective tenants? Do they have standardized criteria? Are they aware of the latest laws and regulations? Do they use credible 3rd party partners to conduct detailed background checks? Do they screen financial background, criminal background and eviction background? Do they actually check with employers and past landlords?
6) Rent and security deposits collection
Do they make it easy for the tenants to pay rent? Do they accept payments electronically? Is there a process in case the tenant is late on their payment? Do they hold funds in separate trust accounts according to the law?
7) Bills and Financial reporting
Does the company pay your bills like mortgage or taxes? Does the company allow for your statements to be available 24/7/365? Do the statements show all the income and expenses of the property for maximum transparency? Does the company send you a monthly statement to your email and your money directly to your bank account? Does the company provide you with a 1099 and a comprehensive income statement at the end of each year?
When you’re interviewing property managers, make sure to ask if the company has a full time maintenance crew and a list of trusted partners they use. Can they handle all repairs? Can they manage bigger projects like bathroom remodels or roof replacements? Do they have a Maintenance Cost Control Guarantee in place to make sure you approve all expenses over a certain amount?
Does the company conduct regular annual inspections? Do they create a report with images and descriptions of deficiencies after the inspection? Do they share the report with you and your tenants? Do they conduct a move-in inspection prior to each tenancy and a move-out inspection after each one?
10) Preventative Maintenance Plan
Does the company have a comprehensive 12 months Preventative Maintenance Program that allows them to stay in touch with your property and catch issues early before they become large and expensive?
11) Termination of your Agreement
What are the conditions for you to back out in case the relationship is not working out? How long of a notice is required? Will you be charged any fees? What happens with all the documentation, rent funds and security deposits that the PM company is holding?
How does the company handle evictions? Do they have a partnership with a trusted lawyer? How many did they have in the past year?
This post is provided by our friends at Stepan Renc, Owner of LongStreet Property Management.
Please feel free to reach out to them at 503 436 3300 or via the website if you’re looking for property management services in Corvallis, Albany or the greater Portland metro area.