In the United States, there are approximately 48.2 million rental units, and 70% of all rental properties are owned by individual investors. What's more, 34% of all American households are in rental housing.
Investing in real estate property can earn you solid profits, but you need to understand how to manage your investment. This includes managing your properties effectively. To do this, you must find a residential property management company that can meet your needs.
Although it may initially feel overwhelming, you just need to know what questions to ask during the hiring process.
Keep reading this guide to learn six questions to ask when hiring a residential property management company.
1. What Level of Experience Do You Have?
Remember, the ultimate goal is to find a property management company that can handle every aspect of your property. This includes things like marketing, tenant management, and maintenance.
Ideally, you want someone with years of property management experience. They must be comfortable in the real estate industry and understand how it works. You should also check for management experience, such as interacting with tenants and solving problems.
Finally, be sure to check that the company you choose has the proper licensure. Most states require a property manager to have a property manager's or real estate broker's license.
2. What Services Do You Offer?
Having access to the right residential property management services is essential. The last thing you want to do is hire a company that doesn't offer the services you need.
You need to find a reputable company that offers various services, starting with resident screening. Property management companies have professional screening systems in place that ensure you rent to solid tenants.
These screenings include employment, rental, and criminal background checks. They'll also ensure your tenants have enough income to afford rent comfortably. Be sure to check if the company will handle rental collections, which consist of sending out invoices and collecting funds.
Other services to look for include:
- Property marketing using digital tools that increase exposure
- Property maintenance for repairs and routine maintenance
- Property inspections to inspect the status of your rental properties
- Financial reporting includes monthly reports of earnings and expenses
You should also look for vacancy guarantees. This ensures your rental property will be rented quickly.
3. How Long Does It Take You to Fill a Vacancy?
Residential property managers should have a solid plan in place to fill vacancies. The longer you have vacant properties, the more it affects your income and investment overall.
A property should rent within 30 days once it's on the market. If vacancy rates are longer than this, it could mean the property is priced too high. It could also be a sign that the property isn't being advertised enough.
Don't be afraid to ask specific questions about how the rental company addresses these vacancies. An experienced property management company should be able to price your rental accurately and have a marketing plan in place.
Check for a marketing plan that includes quality pictures and a virtual tour. It should also be widely shared across social media and easy to find.
Finally, check to see if a vacancy guarantee is in place that ensures your property doesn't sit longer than a month. This might include free property management services until the unit is rented.
4. How Do You Screen Tenants?
It's best to get a good understanding of how the property management company screens tenants. Remember, this is your investment, and you must ensure it's in good hands.
First, you'll need to check if the tenant screening covers the basics like:
- Credit check
- Criminal History
- Rental history
- Income verification
- Rental references
You should get details about the credit check and deposit information. For example, a tenant with a credit score below 615 can affect the deposit amount. It may also require them to have a co-signer.
It's also critical that the company checks rental references regardless of whether they're from an apartment complex or former landlords.
Checking this information is a key part of real estate investing, so don't be afraid to ask as many questions as you need to.
5. What Types of Rental Properties Do You Manage?
It's best to get a good overview of the types of rental properties the company has experience managing.
This is because each property type requires certain skills to manage effectively. For example, managing commercial properties is completely different than residential properties. This includes the types of tenants and marketing necessary to rent the property quickly. There are also differences in managing maintenance.
On the other hand, managing residential rentals like single and multi-family properties is a totally different game. In these cases, a company needs experience with tenant and maintenance management of these types of units.
Make sure to ask for a portfolio to get a better idea of the properties the company has successfully managed.
6. What Are Your Fees?
Property management fees can vary, so it's important to understand what you'll be paying for.
Some companies might charge a flat rate, while others offer rates based on the rental amount. Make sure to find out the details about pricing structures and options.
You also need to find out about any miscellaneous fees. Property management companies typically charge fees for the work they perform. This can include fees like:
- Maintenance fees
- Eviction fees
- New tenant placement fees
Vacant unit fees are also important to ask about. Some companies charge a flat rate for units regardless of whether they're vacant. However, you won't pay vacant unit fees if the fees are based on the rent collected.
Double-check that all fees are explained in detail in your property management contract. Remember, if you're in doubt, don't sign anything until you feel comfortable with the agreement.
Hire a Residential Property Management Company Today
Asking these questions will make hiring a residential property management company that meets your needs much easier.
If you're still looking for a property management company in Charlotte MSA, Gastonia, Concord, or Fort Mill, you can turn to Bottom Line Property Management for all your needs.
We have over 55 years of combined experience working with single-family and multi-family residential properties. We're dedicated to our clients and residents and ensure the job is done efficiently.
We offer straightforward and transparent services to help you get the most out of your rental properties. Make sure to contact us today to start the process.
