Let's say that you're moving from a house that you purchased a year ago, yet you want to keep it as an investment property. While you're living in your new house, someone needs to oversee the operations and maintenance of your previous house. This is where a property manager comes into play. Here are some tips to choosing the right property manager/management for you!
1. Find out the property management company's fee schedule before you start to officially utilize their services. On average, starting price is about 5% of the gross rent (may increase to 10%) and even a set-up fee. If you feel on edge with the pricing, be sure to call several different property management companies in order to find out the best price for you. Listen to what they say about their company, jot it down, then compare your results with other property management companies.
2. Make sure the property managers approve all the tenants thoroughly. Most property managers just want to get their cut and fail to analyze their tenants thoroughly. This leads to poor tenant choice. When a property manager approves unqualified tenants, they might approve someone who might tear up the property or treat your property inappropriately. And who pays the tenant's damages? You do! So, be careful to personally approve your tenants, not trust the entire job to property management companies.
3. Cheapest is not the best. Almost all property management companies sell their services like a car dealer sells a car. The 5% cut may simply pay off a property manager's most basic services, which is to collect rent and send you a finance portfolio. However, any extra services will require more and more money, leading you to suddenly pay more than you expected. So, if one company offers a 5% commission to property managers and the other offers a 8% commission to property managers, consider both companies. The 5% company may sell their services like a car, but the other 8% company may provide the full package of services.