A stranger is about to move into what very likely used to be your home. And you’re busy. You don’t have time to manage the details of your own household much less fix broken toilet handles at your rental property. Enter property management companies. For those of you who enjoy finding renters, running background checks and putting up with service calls from your residential tenants, have fun. If you’d rather not deal with the grit, grime and daily responsibility of renting out a residential property, here are some tips on finding a property manager who will find a responsible tenant and give you comfort that your property is well-leased and is being properly maintained.
Do Your Rental Research
Research local rents by checking out rental listings on the RealEstate.com – just click on the find homes tab, enter the location you want to research, and select rentals from the drop-down menu. Property managers are motivated to rent your home for the maximum that they can get since they typically take a percentage of the rent as their fee, but they might not be tuned into values for your type of home in your particular neighborhood. Also, laws differ from state to state. Do your due diligence on the tenant-landlord laws for the state that you live in to understand your rights as a landlord before you enter into conversations with property management companies.
Never hire a property management company without a recommendation or two that you trust. If you can, try to find both a real estate agent and a landlord who have worked directly with a given company. Get local recommendations and keep in mind that performance of a national company can vary from market to market.
Explore Your Property Management Options
Some companies offer leasing services only, which can be cheaper than leasing and maintenance. It really depends on how much time you have to dedicate to the rental. Make sure you understand the tenant-landlord laws in your state so that you know how long you have to respond to a tenant request – and whether you want to deal with that.
Tune in to Their Style of Communication
Interview a few different companies and see how they respond to your inquiries. If they get back to you immediately, that’s a good sign. If it takes a few days, weeks or months to connect – not so good. If they’re late to appointments, don’t show up or don’t call, also not so good. Take this as a sign of how they’ll work with you throughout your relationship.
Read the Leasing Agreement
Ensure that you’re covered and have the power to remove a tenant who doesn’t pay the contractual rent and that property damages are covered by an extra month’s rent and security deposit. Also make sure that, based on the laws in your state, the leasing agreement allows you to release yourself from the relationship with the property management company if they do not hold up their part of the agreement.
Gut Check The Property Manager’s Process
Ask your property management company representative about their tenant approval process. Find out how they market properties, what kinds of tenants they install, and what a typical lease period looks like at their company. Also make sure that you understand their background checking process to ensure that both credit and criminal background checks are performed, as well as character references.
Expect to Pay for Property Management
Most property management companies charge one month’s rent plus 10 percent of the monthly rent, which normalizes out to an 8.5 percent fee. You have to decide if this is worth it to you. Choosing to go with a property management company can make your life easier since all you have to do is wait for the direct deposit. Just make sure that you understand what you’re getting into before you sign up.