Choosing the right property manager is a crucial decision for any property owner. Here is a beginner’s guide to help you select a reliable property manager.
1. Understand the Role of a Property Manager
A property manager takes care of the day-to-day operations of rental properties. Their responsibilities typically include:
* Tenant Management: Advertising the property; screening applicants; signing lease agreements; and communicating with tenants.
* Rent Collection: Providing payment options for tenants; collecting rent payments; posting notices; collecting late fees; and preparing for an eviction, if necessary.
* Maintenance: Evaluating vendors; scheduling repairs; communicating with vendors and tenants; and doing inspections.
* Accounting: Paying bills and invoices; providing monthly owner reports; and preparing year-end statements and tax documents.
* Risk Management & Legal Compliance: Staying up to date with local, state, and federal laws affecting rental properties, fair housing, accounting, and other current topics in the property management industry.
2. Choose a Licensed Professional
In New Mexico property managers must hold real estate license and take extra continuing education credits in property management.
3. Check Experience
Don’t assume all property management companies are created the same. A slick website does not mean they have what it takes to manage your investment.
* Experience: Look for a property manager with experience in your type of property. For example, managing a single-family home differs from managing a large, multi-unit apartment building.
* Years in Business: How many years has the company been in business. Property management can be challenging. The companies that have been around for many years show they can handle any situation.
* Reputation: Read testimonials from other property owners. Ask for references and contact their current clients to get firsthand insights. Ask other real estate brokers. They can be a great source for referrals.
4. Know The Fees
A property manager should be willing the share their fees up front. A note of caution: if you choose your property manager solely based on fees, you may be disappointed in the service they provide. A premium property management company will provide excellent service. Like the saying goes, “You get what you pay for.” Some typical fees are:
* Monthly Management Fee: this is usually a percent of rent.
* Leasing Fee: this is the cost of advertising, screening, and moving a tenant into a property.
* Maintenance Fee: this is the cost of coordinating all repairs and work that needs to be done at a house, including screening vendors, having knowledge of what needs to be done, communicating with vendors and tenants, and supervising the work.
* Other Fees: ask about any other fees that the property manager may charge.
5. Ask About How They Screen Tenants
Tenant screening is critical to placing a quality tenant in the home. Do they check:
* Credit history and score
* Employment and income history
* Criminal background
* Screen pets, service and emotional support animals
6. Discuss Maintenance and Repairs
Property maintenance is one of the biggest cost areas for you and one of the biggest responsibilities of a property manager. Ask:
* Is an escrow (balance on account) amount required? How much?
* How do they handle routine maintenance and emergency repairs?
* How do they choose vendors?
* How do they control costs?
* Is there a maximum amount that can be spent on a repair without prior approval by the owner?
* What is the typical cost of a water heater?
7. Communication
Good communication with your property manager is key to a good relationship. These are some questions to ask:
* Who do I talk to when I have a question?
* Do you use email or text?
* Can I have your personal cell phone number?
* When can I call?
8. Interview Multiple Companies
It’s a good idea to interview at least three property managers before making your final decision. Ask each the same set of questions to compare their responses, services, and fees.
9. Request a Management Contract and a Sample Lease
Reading the contract and the lease will give you a good sense of what you can expect from the company and what the company expects from you.
10. Trust Your Instincts
In addition to experience and cost, consider how comfortable you feel with the property manager. A trustworthy and reliable manager will make your life easier, so ensure that you feel confident in their abilities and communication style.
Conclusion
Selecting a property manager is a major decision that can significantly impact the success of your rental property. Take the time to research, ask questions, and carefully review contracts to ensure that you’re choosing a manager who is not only competent but also a good fit for your needs.