HOW TO HIRE THE RIGHT PROPERTY MANAGER
Hiring someone to take responsibility to care for and oversee the management of your rental property is a major decision. Getting the right property manager is essential for both your financial bottom line as well as your peace of mind. Choosing the wrong property manager can cost you tens of thousands of dollars and not all property managers are equal in knowledge and experience.
While you are going through the process of selecting a property manager, keep the following points in mind:
- Find a property manager who is also a licensed real estate broker. Ask to speak directly with the broker. If you are unable to speak with the broker when you are a prospective new client, chances are that you are not going to be able to communicate directly with the broker when there are problems at your property. Would you rather discuss your case with a lawyer or a paralegal when you are in search of a law office. See a Word of Warning below.
- Ask the broker how many years he or she has been managing properties from that location. Find out what year the broker first obtained his or her real estate broker license. Also, keep in mind that a real estate agent license is not the same as a real estate broker license. Your goal is to find out how long that broker has been in the property management business in your local area and how familiar they are with local laws. California is unlike other states and it has many separate and different city rent ordinances in addition to county, state and federal laws. APM has been at this location since 1985.
- Ask the broker about their application screening process. How do they qualify applicants? Are the applicants subject to the owner’s approval? Some property managers do not contact the property owner to go over credit, employment and rental history and simply select and approve applicants. One of the broker’s difficult duties is to guide a property owner through the screening process while ensuring that the property owner abide by fair housing laws. This is why some property managers take the shortcut and shortened the process.
- Ask the broker for the number of tenancies he or she has independently assisted from that local office, rather than the nationwide combined number listed from a national corporation. What you are trying to determine here is the experience of the broker who is running the office at a certain location. At APM, we have assisted over 10,000 San Francisco Bay Area tenancies over the years. We are your local property manager. Also, ask the broker how many hearings, depositions and trials he or she attended on behalf of their property owners. Your goal is to find a qualified property manager in your local area who can defend and assist you when needed.
- Ask the broker for the number of trusted local contractors on their vendor list used for assisting owners with repairs and maintenance. Many owners will eventually realize that the management fee is very minimal compared to the repair costs. Find out how the property managers handle repairs. For example, you can save $50 on the management fee but lose thousands on repair costs. Some property managers have handymen working for them. Their profit center is more focussed on repair costs. One way to find out is to ask for a written estimate on a repair or make-ready then call and find out directly from the contractor whether he or she is an employee of the brokerage or whether the brokerage receives a mark up or kickback from the contractor. Many property managers advertise that they do not have an in-house contractor and they do not mark up the cost of repairs despite they do. We learned from property owners who switched over to APM from other property management companies that this has transpired.
- Ask the broker for a breakdown of all fees. Most property managers in our service area charge between 6% to 10% of the monthly rent to manage your rental properties or they may charge a leasing fee upfront plus a flat monthly fee. We notice a few property management companies that have a LONG list of add on fees and they do not disclose unless you ask for it in writing.
It is difficult to tell when you are a new landlord seeking to find an experienced real estate broker specializing in property management in your local area. Hopefully, these quick tips shall facilitate and assist you in investigating and selecting the right property manager for your rental property. We are here to answer all of your questions about our property management services. Please call us at (510) 487-2583.
A WORD OF WARNING
Many property management companies are not actually operated by a broker. Many companies are hiring a broker of record and pay a fee to use a broker license to run the company. This practice is notorious and very common with national property management franchises and corporations. Also, keep in mind that not all property managers are brokers. In our service area, we noticed a couple national property management franchises which were opened recently but claimed that they have been in business for 30 to 35 years. This is misleading. They are actually advertising how long their national corporate offices have been in business and not the local independent office. Visit this link at https://www2.dre.ca.gov/PublicA