Here are the tips for choosing a property manager that’s right for you.
1. Double Check Experience
There’s no shortage of property management companies out there. And to top it off, a whopping 47.3% of property managers hope to build their business this year.
The thing is, if you don’t look into a property management company’s experience, you could end up selling yourself short on services and overpaying.
When it comes to picking a good property manager, the key is to choose one that has a proven track record. In addition, you’ll want to look for property managers that:
Manage rentals as their full-time job, not as a side gig to make extra money
Can handle the type of investment property you own
Have had specialized training and understand the federal, state, and local landlord-tenant laws
Have been in business for a while but are not overworked and spread too thin
The more experienced your property manager, the better. However, there’s a lot more to think about than just the numbers being shown to prove a company’s worth.
It might only take one conversation with your real estate agent, neighbor, or friend to get a list of property management companies. But follow up on all the referrals. Check review sites like Google, Facebook, or Yelp to gain additional insights and perspectives. While it’s true some people tend to vent on review websites after a negative experience, these sites offer a convenient place to gain a more complete picture of a business. You can also check out any referral with the Better Business Bureau to make sure the company has no complaints.
3. Know the Services You Want
Not all property management companies in Utah offer the same set of services. So, know what you want before you start your search to stay focused and make informed decisions.
Here is a list of some of the most common property management company services:
Rental property advertisements, showings, and tenant screenings
Market research and rent rate setting
Legal lease agreement drafting
Collection of security deposits, first and last month’s rent, and monthly rent
Legal issues such as compliance, regulations, and eviction proceedings
Routine property inspections
Emergency and routine maintenance and repair
Financials related to the property, tenant, and property owner
And so much more
4. Aim for a full range of services.
Depending on whether you go with an individual property manager or a property management company, be sure you’re getting the most bang for your buck. A full-service property management company should be responsible for all the rental marketing, applicant screening, legal documentation, property inspections, rent collection, accounting and reporting, and maintenance. If you are interested in real estate as an investment, choose a company that can renovate and sell investment properties, as well.
5. Make sure the property manager is licensed.
A property management company must possess a broker license issued by the Department of Real Estate. Property managers who recruit tenants, negotiate leases or collect rents also are required, at minimum, to have a salesperson license and be associated with a broker who conducts a property management business. If you expect a property manager to carry on any of those acts on your behalf, be sure they are properly licensed in the state.
6. Listen to your instincts.
Like so many things in life, trust your gut. Take a look
7. Understand the Fee Structure
Again, overpaying for services you’re not receiving (but you think you are) is the worst. To help you with choosing the right property management company, it’s a good idea to educate yourself about common property management fees.
Many companies will charge either a percentage-based fee, a flat fee, or a billed per project fee.
Also, you can expect to possibly pay for fees such as:
Leasing Fees: this is to cover the cost of advertising and showing your rental property. There is also the processing of applications, tenant screenings, and move-in preparations.
Monthly Management Fees: though expected, this fee can cut into your profits if you’re not careful. Management fees cover services such as rent collection, property inspections, and maintenance requests.
On-Boarding Fees: this is usually a one-time setup fee to establish yourself as a client. It includes your account set up and any paperwork that needs processing.
Maintenance Fees: you can expect to pay for property maintenance and repairs. But know that sometimes property management companies mark up these costs to generate more money for themselves. You must choose a property management company with an affordable on-site maintenance crew or Rolodex of trusted contractors.
Lease Renewal Fees: you might pay a lease renewal fee if your current tenants want to stay renew their lease.
Eviction Fees: evictions take a lot of time and money to process. Your property manager might represent you in the case of an eviction. But don’t expect to get off without paying a dime.
8. Check the Insurance
To protect you and your asset, it’s important you use a property management company that has the right insurance policies. Without these, you could find yourself losing out on a lot of money should something happen. Worse yet, you could end up facing your tenants in court.
Another thing to look for while vetting property management companies in Utah is whether they require tenants to have renters insurance. Sure, homeowners insurance covers property damage. But renters insurance takes it one step further.
Should something happen to your property, your tenant’s renters insurance will cover the cost of damages, injuries, and personal belongings. Even if your homeowners insurance covers all this, this takes some of the financial burden off you. Plus, it helps you avoid nasty landlord-tenant disputes over coverage.
Questions you must ask when you’re interviewing the property manager.
Do you hold a license for property management?
Verify the license is active and if they have any violations.
What kind of services do you offer?
What is required from me as the owner on a monthly basis?
How does the owner receive payment and when can I expect it?
How many properties do you manage?
If you have several front doors you are looking to have managed, ask if the property manager has the bandwidth to manage that many more front doors.
Who is my contact? Do I contact the same person for all questions? (Maintenance, accounting, vacancy filling.)
How often does the property manager get eyes on the property?
What are your management fees?
Are additional fees added to maintenance invoices?
Can I expect an annual rate increase?
How do you decide on the rent?
Do you give the tenants annual rent increases?
How do you screen the prospective tenants?
Credit score and income requirements?