Property management can be a scary business. I mean, there are literally multiple horror films about terrifying tenants and the apartments they inhabit.
But these fictional experiences are nothing compared to real life.
Don’t believe me?
Here are three true stories that are too strange for film:
Tenants poured concrete down the drains, forcing the owners to demolish the entire apartment
A woman moved out without telling anyone, and left her cat alone for a month in the house
Tenants moved out and left 18 bags of garbage, and then reported the owner to the fire department for a garbage hazard
So how do you avoid becoming a cautionary tale in the world of property management? Property management software is a surefire way of keeping all of your paperwork in order, but this requires a more human touch. Like a property manager.
Hiring a good property manager can save you the headache and hopefully help you avoid these outrageous experiences. Because aside from rent, maintenance, and other supervising responsibilities, a great property manager should also be well-versed in finding suitable tenants, especially ones who pass background checks. Like ones who won’t leave packages of raw meat behind the walls after being evicted.
Now, an interview is the always the best path to screen potential property manager candidates, but how do you know you’re asking the right questions? What questions do you even ask in the first place?
Not to worry. I’ve done the hard work for you.
Below, I’ve listed ten essential interview questions guaranteed to land you a stellar property manager.
1. How many properties are you currently managing?
With the right tools, a good property manager should be able to manage 200-600 rental units at one time. But you don’t want someone who has any more than that unit range. Your property manager should be able to keep tabs on all of your properties and your tenants to ensure everything is being tended to. Quality not quantity may be key here.
On the other hand, if they’re managing less, they may not be as capable as you want and might not be able to take on more properties if they already have trouble taking on the ones they already manage.
2. Do you have any rental properties of your own?
While it may seem beneficial for a property manager to have their own rental properties, according to Peter Giardini, this is actually a bad idea.
“The way I see it is my properties and my tenants are in constant competition with the managers and their properties,” he says. “If the manager has a vacancy at the same time you do, how can you know that your property will be filled first?”
Even if a manager assures you they’ll prioritize your properties, there’s no way you can confirm it and no way they can prove it until after the fact.
3. What do you charge?
Do they charge a flat fee or a percentage of the rent?
Think about it: managers that charge a percentage of the rent seem like a more viable option since their paycheck depends on number of tenants and the price of rent. With lower rents and high vacancies, there’s no big payoff, which is bad for you and your property manager.
As a result, property managers will be more motivated to fill vacancies and fight for higher rents, keeping them more engaged with your property. You should also consider whether their percentage is based on the amount of rent charged or the amount that they actually collect.
Similarly, do they charge a fee when a property is vacant? If so, this will counteract the purpose of charging a percentage, as there will be no penalty for vacancies.
Finally, additionally consider if there are other miscellaneous fees they charge for their service. Miscellaneous fees have a habit of sneaking up on you.
4. How do you determine rent amount?
A good property manager should know the rents of all comparable properties in your area.
Imagine if your property manager charges more than that market price or significantly less than other properties in the area. A higher price tag could deter interested buyers and a lower price tag could deprive you of the income you deserve. If you adjust prices later on, you could potentially lose renters unable to pay or even pushback from tenants. Not great for overall satisfaction.
Rather, they should use properties both on the market and recently rented to determine the highest possible rental price. They should also know how different amenities, such as a swimming pools or a gym, affect the price of your units.
5. Do you conduct routine property inspections?
Property inspections help you catch problems and conduct maintenance before it’s too late. Whether it’s checking on how tenants are treating your spaces or ensuring that appliances and utilities are functioning correctly, spaces need to be kept in the best shape possible to prevent costly renovations and assure that the space isn't being misused in any way.
Your manager should check up on your properties regularly. Ideally, this should be once a month, not just a few times a year.
6. How do you handle maintenance and yard work?
Most property managers want to be able to make maintenance decisions on their own. Allow them to do this up to a certain dollar amount, usually around $100 to $200.
Be sure to also ask them if they charge extra for maintenance. If so, your profit could lessen considerably, especially if you have an older property in need of updated appliances and utilities.
Also, hammer out who would be responsible for yard maintenance. Is your property manager up to the task or is it something tenants should handle?
7. What rental management tool do you use?
Rental management software is helpful for streamlining management processes and increasing profits, making it an excellent tool for any professional property manager.
Be sure to ask them what software do they use. (If they don’t, you should take that as a red flag, especially if a successful property manager should be managing somewhere between 200 to 600 rental units.) If possible, ask them to share samples of reports from their system, which can give you more insight into their management work ethic.
8. How long are your properties typically vacant?
The average vacancy time for a rental property is around 2-4 weeks. If a property manager takes significantly longer than this, you could lose out on some serious revenue.
Problems here can be twofold:
This property manager could be charging too much for rent based on the area marketplace or requiring a flat fee, which lessens the motivation for them to fill empty spaces. Also, it would be worthwhile to ask about their marketing efforts to see how they list spaces or what they do to get the word out there.
If they’re taking less than less than two weeks, they may be charging rates that are too low for you to make a solid profit or even skipping background checks that assure quality tenants. Ask them about their screening process.
9. What is your eviction process?
A property manager should have a standard eviction procedure that follows state laws. It might be wise here to research some of these yourself to know whether or not your interviewee is up-to-date on the latest developments in the law.
Ask if they offer an eviction warranty. This is often just a small fee, but will offer coverage if one of your tenants needs to be evicted.
10. How can I cancel my management contract?
Once you sign a contract, is there any way for you to escape it? Talk about a horror story.
If you decide to sell your house, can you terminate your contract, or do you have to sell your house with the same property manager? Definitely something to ask so you don’t end up in the crosshairs of a contract.
The best managers will keep your business with great service instead of unbreakable contracts, so be sure to ask them a few questions about this and read the fine print if you both do decide on some sort of business contract together.
More?
Have you hired an awesome property manager? What interview questions did you ask them? Let me know in the comments below.
*Also, if you have any tenant horror stories, I’d love to hear them.