A rental property is a great opportunity for you to provide residential housing to individuals and families while you hold an investment that can earn you equity and cash flow over a period of time. However, when you cannot manage the property because of time or location constraints, it is helpful to hire a professional property management service to handle your rental house.
The following are some recommendations to help you search out and select a successful property manager to handle your rental house.
One of the first steps in looking for a property manager is to ask around. Ask other rental property owners you know and other investors in the business. And if you know a real estate agent in your area who has rental properties, you can ask who they use, like, and can recommend to you. When you ask others who they like, they have already taken the time to weed out a bad manager and look for a property manager who does excellent work and has a great business setup.
Ask About Fees
When you meet with a potential property manager, you should get an idea of how they handle the rentals, the tenants, and the fee that they charge you and the tenant. Find out how much the property management fee is for you on a monthly rate and if they charge you a tenant placement fee. They may also charge a contract initiation fee when you first sign on with their services, which can be to handle the paperwork and getting your account established.
The amount you pay to the property manager for a property management fee can be anywhere from ten to fifteen percent of the monthly rent. So, for example, if your rental property's rent rate is $850 each month, they will charge anywhere from $85 to $127.50 for their management charge. And for the tenant placement fee, they will charge a one time fee, which can be up to a month's rent.
You will also want to know how they handle tenant screening and if they charge an application fee to complete a background check on a potential tenant. The background check should cover looking into the tenant's credit and any criminal and eviction reports.
If your property needs repairs or maintenance completed, you should find out how much your property manager needs to alert you on a repair before they can proceed with the work. For example, you might agree to allow them to handle repairs under $250 without getting your approval before going forward with the work. Then, for small work, they can complete the work in a timely manner and bill you afterward. But if a major repair is needed on your property that costs more than $250, they will need to communicate with you first.