What Every Homeowner Should Know About Hiring a Property Management Company

When it comes to owning and managing rental properties, the responsibilities and challenges can quickly pile up. From finding trustworthy tenants to handling maintenance requests and legal compliance, the demands of property management can be overwhelming for homeowners.

That’s where a property management company comes in.

Hiring a professional property management company can alleviate the stress and streamline the management process. However, hiring a company whose systems and processes don’t align with the experience you want as an owner can lead to frustration. Before entrusting your rental home to a third party, it’s crucial to understand the ins and outs of working with a property management company.

Here are key factors that homeowners should know when considering hiring a property management company. From services provided to communication practices, these insights will help you make an informed decision and find the right partner to maximize the potential of your rental property.

Services Provided:

Understand the specific services offered by the property management company. This may include tenant screening, rent collection, property maintenance, lease enforcement, and accounting. Ask to see a sample of their rental listings of homes similar to yours so you can understand how your rental will be presented.

Experience:

Ask if the company has experience with homes similar to yours. Ask about their marketing strategy, how much they spend on marketing your home, average inquiries and average days on market for their rentals.

Fee Structure:

Understand the fee structure of the property management company. Ask about management fees, leasing fees, maintenance fees, and any additional charges. Compare these fees with other companies to ensure they are competitive.

Communication:

Evaluate the company’s communication practices. Effective communication is crucial for a successful partnership. Ask about how they handle communication with homeowners and tenants, and how frequently they provide updates, and how quickly they respond to owner communication.

 Tenant Screening Process:

Ask about the company’s tenant screening process. A thorough screening helps ensure reliable and responsible tenants. Ask about their criteria for tenant selection, background checks, credit checks, and eviction history.

Maintenance and Repairs:

Understand how the property management company handles maintenance and repairs. Inquire about their process for addressing maintenance requests, emergency services, and how they select and manage vendors.

Lease Agreement and Legal Compliance:

Ensure the company has a strong understanding of local landlord-tenant laws and regulations. Ask if where they got their lease agreement. Did they have a real estate lawyer draft it? When was the last time a lawyer reviewed?

Financial Reporting:

Ask about the company’s financial reporting practices. They should provide transparent and detailed financial statements, including income and expense reports, rental income collection, and any necessary tax documentation.

Exit Strategy:

Inquire about the termination process if you decide to end the contract with the property management company. Understand the notice period required and any associated costs.

Contract Terms:

Carefully review the contract terms before signing. Pay attention to the duration of the contract, termination clauses, and any other specific provisions that may affect your partnership.

Remember, it’s important to thoroughly research and interview multiple property management companies before making a final decision. While most property management companies offer similar services at initial glance, the experience you’ll have with each can vary tremendously. Due diligence up front can help you find a manager that’s the right fit for your specific needs.