You already know that investing in rental properties is a smart idea. These properties provide not just steady income, but also a great way to increase your personal portfolio. However, when you own several rental properties, the time required to care for and maintain these rentals can get out of hand.
Don’t let your investments take over your life; hire a reliable property management company to take care of your properties!
When you do decide to hire a property manager, there are ten things you should look for:
- Look for a licensed property manager: When a property manager is ‘licensed’, it means that he or she has taken an approved property management course and passed the state licensing exam.
- Next, make sure to take a look at a sample of the properties that are currently managed by the property manager. Get the addresses and go take a look. See if the properties are in good shape–are they being taken care of?
- Look at the management fees next. Are they reasonable? There are no standard management fees, but typically fees run anywhere from 3 to 10 percent of the monthly rent.
- Ask if the management company inspects property on a regular basis. You want to make sure that your investments are checked out at least once a year on the inside, and quarterly on the outside.
- Ask the property manager how often they have to deal with evictions on their current properties. If they have a high rate of eviction; that tells you that the property manager isn’t screening applicants very well.
- Find out how they deal with repairs and maintenance issues. Some property management companies hold a maintenance reserve fee, which is taken from your monthly rental income to cover minor expenses. Other companies will just bill you for the repairs.
- Set up clear accounting procedures. Find out when you will receive rental funds and ask for actual receipts for all repairs.
- Look the management contract over closely. Look for details on late fees and pet deposits: who gets to keep the funds? Know all the details.
- Secure a written agreement that includes a termination clause. This way, if you are unhappy with the management company, you have a means to end the relations.
- Make sure the property manager will always be accessible when you have questions. You don’t want someone who is always too busy to speak with you.
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