Looking for the right property manager requires a bit of homework. You have a house but you’re often out of town or live in another city and you don’t want to go through the hassles of advertising your property, screening tenants, collecting the rent, answering late night calls for repairs and handling emergency plumbing problems. You prefer someone else do all that for you.

Property Management: Things to Consider

How do you start looking for a property manager?

We believe in referrals. We put more credibility in the recommendations of friends and families who have dealt with property managers before. If no one can recommend a property manager, our next instinct would be to let “our fingers do the walking”; that is, open the yellow pages and turn to “property managers.” We would also call real estate brokers because they’re likely to know of property managers;some real estate brokers actually hire them to look after vacant properties. Another alternative would be to ask your bank.

These tips in looking for a property manager should serve as guidelines only. We encourage you to do due diligence by double-checking and if possible, making sure that what the property manager tells you is accurate. The last thing you want is to leave your property in the hands of a person or company who is unreliable and negligent.

1. Look for a property manager who specialises in residential management.

This is important because there are property managers who specialise in commercial property management. Given the volume of business they do, your house may not fall under their “preferred list of clients” since they earn higher revenues from commercial properties.

2. Find out if a property manager is licensed.

Some states in the US require property managers to be licensed real estate brokers or at least have some kind of real estate certification relating to property management. In Canada, we know that the province of British Columbia requires individuals interested in becoming property managers to take a course and then take a qualifying exam after the course. We’re not sure about the other provinces but our educated guess is that they require a license as well. The same applies in the United States; about 95% of the states require licensing.

Of course, if you’re just going to ask a good friend or cousin to look after your house while you’re away, you need not ask her if she has a licence.

When we say property management, we’re referring to full management of your house on a long term basis. Full management would cover everything from advertising your property, collecting rent and perhaps even litigation (eviction notices as an example). A property manager who is forced to evict a tenant will need the services of a lawyer.

3. Ask about fees.

This is something that you will have to decide or negotiate on. Some property management companies charge a percentage of the gross rental amount per month, while others have a set fee. Still others will charge a fee covering only certain services and then charge separately for other services. Be clear about this and obtain their quotes in writing.

4. Ask them about how and where they advertise their vacancies

One of your primary concerns is to have your property rented at all times. A vacant house or condo does not generate any revenue and you’re paying a third party to manage it. You therefore want an income-generating asset that will provide you with a monthly income consistently. Sometimes, property managers will forget to advertise a vacant property when they receive the tenant’s last rent, or else advertise in papers that have only a limited circulation.

5. Ask them how they screen tenants

Property managers who are experienced in the area of property management have ways and means of finding out if a tenant will pay the rent or is a delinquent tenant. Ask them how they screen good tenants from the bad. Do they look into a prospective tenant’s credit score or call previous landlords?

6. Ask them how they deal with maintenance problems and whether they have the resources to do so

A compelling reason for you in hiring a property manager is to have someone else handle repairs. Good property managers have 24/7 maintenance service and have hotlines to plumbers, electricians, etc who will respond to a maintenance call at all times. Ask the property manager if their fee covers all kinds of maintenance problems or if certain maintenance issues are charged separately. Again, be clear on this. You have to know exactly what you’re paying them for.

7. Ask them if they will let you know immediately if your property is vacant

Some property managers ask tenants if they wish to renew the lease or vacate the property a few months before the lease expires. This notice is usually given to the tenant anywhere from one to three months before the lease expires. Property managers should notify you at least 30 days before your property is vacated. At that time, they will inspect the property and inspect for damages. If they decide that the repairs should be charged to the tenant, they will inform the tenant. But if the repairs are a result of normal wear and tear, you may have to bear the repair costs, the idea being to make the property marketable and presentable to the next tenant.

8. Ask them if they provide legal services should a dispute about the property or tenant arises

Reliable property managers usually have access to lawyers who are on a retainer basis. You can ask them about their experiences in this particular area: how did they handle unpaid rents, unreasonable noise and disruption caused by tenants, neighbor’s complaints, zoning regulations and other issues.

Summing Up Property Management Issues

If you’re going to be away for only brief periods and you’re not sure if you’re going to be living in another city or country for extended periods, then it may not be worthwhile to hire a property management company. Perhaps your mother or uncle would be willing to look after your house while you’re gone. If it’s just to water your plants, collect your mail, turn off the heating and water systems and make sure that your house is okay, then there is no need to incur the extra expense of hiring a property manager.

But if you want your house to be rented out for at least a year and you don’t have anyone you can rely on to check on your house regularly, then it makes sense to hire a property manager. When looking for a property manager, these are the things you should factor in your decision:

• financial management
• marketing / rental
• tenant management
• property management
• emergency response systems