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 or a California licensed property manager. If you are unable to speak with the property manager when you are a prospective new client, chances are that you are not going to be able to communicate directly with the property manager or broker when there are problems at your property. See a Word of Warning below.
- Ask the property manager how many years the brokerage has been managing properties from that location. Your goal is to find out how long that brokerage 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 in the property management business since 1985.
- Ask the property manager 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 property manager’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 duty is time consuming and is the reason why some property managers take shortcut and shortened the process by not involving the property owner in the screening process. For more information on our screening process please click here.
- Ask the property manager for the number of tenancies the brokerage has independently assisted from that local office. What you are trying to determine here is the experience of the property manager and broker who are 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 property manager how many hearings, depositions and trials the brokerage attended on behalf of their property owners. Your goal is to find a qualified property manager in your local area who can guide and assist you when needed.
- Ask the property manager for the number of trusted local contractors on their vendor list used for assisting owners with repairs and maintenance. Many property owners will eventually realize that management fee is very minimal and is a fraction compared to maintenance and 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 property manager 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 plus a flat monthly fee. We also 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
Several property management companies in our area are not operated by a real estate broker although that is a requirement by the Department of Real Estate in California. Many companies are simply 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 national corporations. These out of state companies were also opened recently in our service areas but claimed that they have been in business for 30 to 35 years. This is misleading. Their outsourced staff from other states and oversea is not familiar with local laws which is a huge liability to landlords. Real estate is local, and property management is hyper-local. This is the main reason why a couple of them went out of business after a few years. Visit this link at https://www2.dre.ca.gov/PublicASP/pplinfo.asp to examine how long the property management companies have been in business in California. The department website lists the year and the name of all the real estate businesses they have affiliated with since they were licensed in California.