Do you have rental properties that are taking up too much of your time each week? If so, you may be looking into a property management company to take care of the bulk of the work for you. Before you sign an agreement with a property management company, here are some questions you'll want to ask.
Who Sets the Cost of Rent?
Property management companies make a profit by taking a percentage of the rent of each tenant that they manage. That is why it is important to know who sets the price of rent for rental units once the management company takes control.
There are advantages and disadvantages to setting your own rent price for a property. While you can pick a price for rent that will give you the income you need after the management companies cut, you may be undervaluing your property. Management companies have experience pricing properties just like yours, and have a good idea what they will rent for.
What Maintenance Companies Will Be Used?
It's common for property management companies to have a list of vendors that they use for performing property maintenance. This ranges from plumbers to fix problems within the building, or lawn care company to cut the grass. You'll want to find out what maintenance companies the management company has a relationship, and let them know if you have any concerns.
For example, you may have worked with a plumber in the past that did not do a good job. Knowing the list of plumbers they use can raise a red flag early on to not allow a specific plumber in your rental property.
How Is Rent Collected?
You currently may have a system for collecting rent that involves taking physical checks to the bank to cash them. However, a property management company may have a better way of doing it. Find out if they allow rent to be collected through an automatic bank transfer or even a credit card payment, which can be more appealing for tenants.
Who Handles Evictions?
Dealing with a bad tenant can be stressful, mainly due to the physical confrontation that comes with an eviction. Find out who will be handling the eviction process if it is necessary. You may want a management company that handles it all for you, so you don't have to deal with confronting a client that is being kicked out of the rental property.