Top Strategies for Finding a Good Property Manager
Written by: Veronique Hart, Property Management Specialist - Updated: Aug 31, 2022
Your choice of property manager will determine how much income you’re able to generate from your investment properties. The best managers will know how to keep tenants satisfied and your properties occupied, while less effective managers often struggle to maintain low vacancy rates.
It can be difficult to assess property managers until you actually start working with them, but there are both positive signs and red flags you can watch out for before you get to the point of hiring anyone. Below, we’ll review everything you need to know about finding a good property manager.
Where to Look for Property Managers
Do you know anyone, maybe a friend or family member, who works in the real estate industry? If so, you should ask them if they know anyone they would recommend — these personal connections can help you find a high-quality property manager quickly. If you don’t know anyone in the industry personally, but you are a homeowner, another option is to ask the real estate agent who sold you your house if they could make a recommendation.
Networking is convenient, but these personal connections certainly aren’t necessary for finding a property manager. There are also online resources, such as the directory right here at PropertyManagement.com, that you can use to find top providers in your area. We’ve identified the best property managers in dozens of cities across the country, and we’re constantly adding new cities to our directory.
Narrowing Down Your Top Options
The best way to predict your experience with a potential property manager is to see how previous customers have described their experiences. Unless the firm is new, they will likely have at least a couple reviews on Google. More established businesses may have dozens or even hundreds of reviews you can use to evaluate the quality of their service.
Ideally, a property manager will have an average score of at least 4.5 out of 5 on Google. If one of the firms you’re evaluating has an average score below 4 out of 5, you should probably move on to other options — one exception to this rule, though, is if the provider only has a handful of reviews. In that case, all it takes is a single negative review to drag the average down, so you should consider reading the bad review to see whether it’s reasonable.
You can also use the Better Business Bureau (BBB) to evaluate property management firms. The BBB assigns a letter grade to companies based on factors such as their reputation, the amount of time they’ve been in business, and their business practices. You can also read specific complaints from former clients on the BBB website.
After checking out Google reviews and BBB ratings, it should be clear which property managers are the top options in your area. But before you move forward, we recommend you check out some of the properties managed by these firms in person. This will give you a chance to see for yourself how well they take care of their properties — without even entering the building, you’ll be able to determine whether they’re keeping up with trash collection, landscaping, etc. You could also chat with current tenants to see if they’re happy with how the building is being managed.
Interviews and Negotiations
Once you’ve narrowed down the top options for property managers in your area, the next step is to reach out and request interviews. While the exact topics you should address will depend on your situation, there are a few basic questions that should be asked in every interview with a property manager:
- What services do you offer?
- Are these services included in the management fee, or do they cost extra?
- Will I still be charged a management fee or any other fees when a unit is vacant?
- What types of properties do you usually manage?
- How many units are in your property management rental network?
- On average, how long does it take for you to find tenants for vacant properties?
The answers to these questions will help you determine whether a property management firm is a good fit for your specific needs. They’ll also help you determine whether a given option is a good fit for your budget — it’s important to get into the details of their pricing structure, as some firms make themselves look more affordable than they really are by charging extra for services that aren’t included in their basic management fee. Conversely, you should keep in mind that a provider with a relatively high management fee might be the best deal available if they include most of their services under that fee.
You should also ask about certifications during your interview. If a property manager has been certified by an organization such as the Institute of Real Estate Management or the National Association of Residential Property Managers, this indicates they know what they’re doing.
Even if the first property manager you interview seems like an excellent fit, you should still continue to interview your top options. This decision will have a huge impact on the financial performance of your properties, so it’s important to be as informed about your options as possible.
Finally, after you’ve settled on which manager you will hire for your property, you can use the following tips to negotiate better terms for your contract:
- Clearly define the fees: Loose talk during an interview is one thing — now that the cost is being set in writing, you must confirm you understand exactly how much you will be charged for their services. If the property manager was vague about this topic during their interview, there may indeed be some hidden fees tucked into the fine print that you need to watch out for.
- Clearly define the responsibilities: You must also understand what the property manager is responsible for as well as what you are responsible for before you sign the contract. For example, if you were expecting the property manager to take care of all maintenance and repairs, you should get that confirmed in writing.
- Ensure there is a negligence clause: The property manager will surely include language that protects them from liability in a variety of scenarios. This is reasonable in many cases, but you’ll want to make sure you can still hold them accountable if they neglect to keep up with their responsibilities and take care of your property.