7 Questions You Must Ask if You are Investing in Rental Property
What You Need to Ask Before Hiring a Property Manager
If you read our earlier post about property management entitled “What Your Rental Property Absolutely Needs to Succeed” you would know how crucial it is to have a competent Property Manager for your property. Everyone who is considering investing in rental property needs to appreciate the role of this power team member .
Below are seven (7) important questions that you should ask before hiring anyone to manage your property. This list is by no means exhaustive. The more questions you ask; the more informative you will be, This will allow you to be more comfortable with your choice. As you begin investing in rental property you will soon realize that your profits are in their hands. So, don’t take the decision of who to hire too lightly.
7 Questions you Need to Ask
What services do you offer?
- They should be able to provide the full gamut of services such as maintenance, leasing, accounting, etc. If they have a licensed HVAC maintenance worker, they won’t need to do any third party outsourcing to handle any of those issues, which can save you money.
What property management and accounting systems do you use?
- If you are looking for someone to manage a large number of units they better have an electronic database to record all the transactions. In addition, if you will not be located in the same city as your property, you will want to have easy access to the financials and all other applicable transactions electronically. Investing in rental property means learning about the tools you need to monitor and control your property.
How many units do you presently manage and what classes are they?
- You are looking for experience. If you are looking for a company to manage a 100 unit complex, you will want them to have experience with at least that many units. If you have a C class property, it can be managed differently (i.e. advertising) that an A Class, so it’s key to find a manager with the “right” experience.
How are you insured and licensed?
- Ensure they have all the proper licenses and insurance coverage. (I.e. errors in omission coverage, tenant discrimination insurance, etc.)
How long have you been in business? Do you have any referrals?
- This speaks to their level of experience. If you are not going to be there to keep your eye on their work, you need to trust that whoever you choose has the depth of knowledge and experience to do it well without you there. Referrals are a great way to gauge their performance from other clients.
What do you see are your most important responsibilities as a property manager?
- If they respond with increasing your NOI and reducing your expenses, you are on your way to finding a company that understands the heart of property management. Keeping impeccable financial records and records management is another key role, as are keeping the tenants happy and in their units.
What is your average vacancy and how do you handle it?
- Your property manager needs to have a solid plan on how to fill vacancies. Unoccupied units are lost income you can never get back, so minimizing vacancies is essential to your investment property’s success.
These questions only touch the surface on what you need to know about your potential property manager. The important thing to take from this is to be diligent in your selection process. The success of your property depends on it!
If you would like to learn more about investing in rental property or find out what’s involved in investing in multi-family assets Contact Us.
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