15 Questions to ask your Property Manager

Questions to ask Property Manager

15 Questions to ask your Property Manager

Are you looking for a Property Management Company? Here’s what you should ask them before you sign the dotted line.

By Faraaz Hashmi

If you are looking for a professional property management company to manage your rental property, you have thousands of property management companies to choose from. Here’s a super helpful guide to help you choose the right property management company.

As we have helped hundreds of homeowners save more time and more money by managing their properties on behalf of them, we definitely know a good deal about choosing the right property manager.

Great questions lead to great answers. Given our experience in the industry, we could comfortably write an article titled ’50 questions to ask your property manager’.

But we understand the value of your time and hence we are going to stick with just 15 questions that will help you decide on the property management company.

Let’s go. We have also weighed in our thoughts on what answer can fit the bill for every question.

Questions to ask a Property Manager

1. How long have you been in business?

If a company is at least 5 years into the property management business, it is a great sign. They would be managing hundreds of homes and you will be able to check a decent number of online reviews on Google or Yelp if they have been in business for this time.

This also means that they will get discounted rates from their strong network of service providers for repairs and maintenance saving you more money. 

Keeping your property green and eco-friendly is good for you and for the environment. It also makes your tenants happy.

2. How many homes do you manage?

A great restaurant has many customers. A great product has many buyers. A great property manager manages a good number of properties. 

Depending on the size of their team, the number of properties they manage can be a clear indicator of how good they are in what they do.

3. What property management services do you offer?

Most of the property management companies will have an extensive list of services mentioned on their website. As a homeowner, it is important to understand the complete list of tasks that will be handled by the property manager.

Going with a property management company that handles A to Z is the best idea as the whole point of going for a property manager instead of self managing your property is to set it and forget it.

Are you still on the fence on choosing self managing vs property management? – this article will help you evaluate your costs and benefits.

4. Do you manage any rental properties in my area?

     It is important to hire property managers who have a thorough understanding of your area or neighborhood.

Their knowledge about your area can be a differentiator when it comes to finding quality tenants quickly by focusing on marketing the positives of your neighborhood

5. What types of properties do you manage predominantly?

Every property management company has its own strength when it comes to property types. They might dominate one or few categories as most of the properties they manage will fall into those categories.

It is essential to understand their strengths and check if your property falls into those categories as each type of property comes with its own set of property management challenges.

6. How much do you charge per month for Property Management?

Pricing is always a critical factor when it comes to signing the dotted line. The pricing charged by the property management company is inversely proportional to your return of investment from your rental property.

It is essential to understand their strengths and check if your property falls into those categories as each type of property comes with its own set of property management challenges.

Lower the property management fees, higher the savings.

Most of the property management companies will reveal their pricing when you get on a call with them. In this day and age, we feel it has to be transparent and outright displayed on the website.

It can either be a flat fee pricing per month or a percentage of your monthly rental income every month or the greater of the two.

(At Skybridge, we have added a welcome twist to the same. You can calculate your pricing on your own here)

7. Are there hidden charges apart from my monthly costs?

The devil is in the details

In terms of pricing, the little * next to the number holds the key to your surprise bills. Check with the property management company on what are the other standard charges that you can expect from them.

Leasing fee, Tenant Replacement Fee, Inspection Fee, Credit check fee.

Some companies can say they handle everything at a fixed monthly cost, but they might come back in a few months to overcharge on specific services that will eventually increase your costs.

8. How will you find good tenants for my property?

Their answer should educate you on their marketing strategies for filling up a vacant rental unit as well as their action plan on how they find and vet a tenant.

It will definitely include background checks, employment check, credit check as well as previous landlord references.

9. How quickly can they find a tenant?

This question is really important from your perspective as the more time your property remains unrented, the more money you are missing out on.

Especially in the LA and Orange county area where there are a lot of qualified tenants looking for a home to move into, an unrented property is a big no-no.

Many property management companies offer guarantees on how quickly they can find a tenant.

10. Can I cancel my contract if I am unhappy?

Contracts can be a great idea to lay out everything officially but make sure you are not locked with no quick way out into a contract with a property management company.

There should definitely be a way to exit the contract easily if you are unhappy with their services. You should be able to switch to a different property management company instantly.

If their answer is no for this question, RUN

11. How do you handle service requests?

One of the best benefits of hiring a property management company is that you need not worry about handling the service or maintenance requests of your tenants.

Property managers will handle everything on your behalf. You will need to understand the complete process.

Will you be making the final call when it comes to repairs and maintenance? Do you need an authorization if it’s above a certain number?

Professional property managers will be able to take you through their tried and tested plan when it comes to service or maintenance requests.

12. What is the percentage of vacant units in the properties you manage?

If this percentage is below the market standards for the area, they are a good fit. If it’s higher, it means that they are not the best in the business.

13. Does your team include specialists or generalists?

If they have an in-house legal team, you can stop worrying about all the legal aspects of renting out your property in case things go south.

If they have a marketing expert in their team, it helps in getting the word out effectively about your vacant property and getting a qualified tenant faster.

If they have an in-house accounting team, you can forget about the numbers and taxes as it will be all done for you.

One of the main reasons of going for a property management company is that they will take care of everything professionally instead of you figuring out everything.

So, it is important to work with a team that has experts on board than having a generalist who does everything.

14. Will you help me grow my investment portfolio in Real Estate?

This is a good-to-have as the property managers with a investor mindset will be able to offer practical advice to increase your real estate portfolio as well as bring in vetted opportunities for you to consider.

Great property management companies have their own sources for finding great rental properties in your area that is not yet on the MLS sites.

15. Can you explain Fair Housing Laws?

Seasoned property managers know fair housing laws like the back of their hand. They should be able to answer any questions you might have in the housing laws.

Of course, it is hard for the property manager or the property management company to score 15/15 in this test.

From a homeowner’s perspective, you can decide on what factors are must-haves or good-to-haves and you can make a wise choice accordingly.

May the force be with you.

Self Managed Vs Property Manager – Everything you need to know

Self Managed Vs Property Manager

Self Managed vs Property Manager

We will break down the costs and value of self managing your property compared to choosing a property manager to do it for you

By Faraaz Hashmi

As a customer-focused property management firm, we meet over 25 homeowners every month and one important talking point during our meetings is the difference between having properties that are self-managed vs homes managed by a property management firm. 

Before we get our hands dirty with the pros and the cons, let’s work out some numbers. 

The Time Factor

The first and foremost thing to be done is to put a $ value for an hour spent by you.

If you are a full-time employee, divide your monthly income by the number of hours you work per month. If you are a freelancer or a solopreneur, the calculation is even easier as you will know your hourly rates.

In Los Angeles, the average household income is $51538.

This is a gross number and it does not include taxes. For the purpose of calculation, let’s assume you are a single earner in your house, and you make $51538 per year and you work 40 hours per week.

Yearly Income – $51538

Approximate Monthly Income = $4294

Approximate number of working hours per month – 160

Hourly Income – $26

If you would like to calculate your approximate hourly income, you can use the calculator below.

Now that we know the $ value for your hours, we can dive into the value and costs of self-management vs property management. 

Your Profit Margin

Credit : Giphy

For a homeowner, the basic profit calculation every month boils down to the following simple equation. 

Monthly Profit = Rental Income – (Mortgage + Expenses)

The expenses entered in this equation is mostly the costs incurred for maintenance or repairs.

What is often overlooked in this equation is factoring the expenses in terms of your time and energy spent as a landlord in managing the property on your own.

Energy spent cannot be measured but the time spent can be easily measured.

Let’s say you spend an average of 8 hours every month to manage your property including trips to your property to collect rent, regular inspections etc.

Assuming your hourly income as $26, you are spending $208 every month for self-managing your property. If you have a couple of properties or more, this cost would go even higher. 

If you still think it’s right up your alley, here are the top four landlord duties you will be taking on when you self-manage your property. 

 1.     Maintenance

 This comes right at the top of the list as the need for maintenance can crop up anytime in your rental property. There is a difference in the way an owner treats his house compared to how a tenant treats the house he lives in. We’ve all been there. 

Apart from the routine maintenance checks to keep the appliances at good condition, you might also have to respond to emergency maintenance requests from your tenants.

 Importance: Let’s say you absolutely love your tenants. For you to retain the tenants, they have to be happy with the property. If they feel there is a delay in attending to their maintenance issues, they will start looking for a new place. This might affect your profits and mortgage payments even if the house remains vacant for just a month.

 Who does it better: Property managers have a significant(unfair) advantage when it comes to maintenance and repairs as they can get great discounts from service providers as they provide the service providers with job orders every month. You can save a lot on the maintenance costs when you work with a property manager.

 2.   Rent collection

On the outset, the collection of rent at the start of every month sounds like a trivial issue. The major cause of any rifts between the homeowner and the tenant is a delayed rent payment.

Instead of wondering why the rent cheque has not reached your mailbox or frantically calling your tenant who is on vacation, you can automate the rent collection using new-age applications.

Importance: Importance of rental income does not require an explanation.

Who does it better: If the homeowner does not mind following up with the tenants every month on delayed rent payments, the odds are just the same for both self-managed homeowners and property managers.

 

3. Managing the Vacancies

 A vacant rental property does not generate any revenue. As of 2018, only 4% of the rental properties are vacant in the Los Angeles – Orange County.
 
With limited supply and huge demand, this is great news for a homeowner as there are a lot of tenants looking for a home to rent. However, the competition is not only between the tenants but also between the homeowners (4%) in marketing their property as the best bet in the market.
 
Importance: When a property remains vacant for a significant period of time, the homeowner is at a disadvantage because he/she is losing money every month. Marketing a property today requires digital marketing skills too.
 
Who does it better: Property Managers have an edge because it is their day job and they are very comfortable in making the best use of modern day online real estate platforms. They have a huge network and they also work closely with tenants in finding them a rental property. They can play the matchmaker and get your property rented in no time. 
 

4. Tenant Screening

 Marketing a rental property is just half the job done. You will receive dozens of applications from tenants for your property. You will have to reach out to them and do your due diligence before you hand the keys to your property.
 
This can take a lot of time as you will have to perform credit checks, background history, job income, eviction history, verify previous landlord references etc. 
 
Once you are satisfied with the above, you will need to schedule the showing with all the prospective tenants. This takes a lot of time than the above three responsibilities.
 
Importance: Dealing with a bad tenant can be an emotionally frustrating experience. It is always better to vet and pick a good tenant as tenant retention and renewals becomes much easier in the future. 
 
Who does it better: If a property manager manages 50 rental units, he/she would have spoken to at least 300 prospective tenants to fill these rental units. This experience is invaluable, and their instincts will go a long way in picking the right cherries. As their day job is property management, they do not need to take time off for tenant showings. 
          
The above four points are the major factors that can impact your decision of taking the self-managed route or hiring a property manager. For the extensive list of the responsibilities of a landlord/ property manager, click here.
 

Final questions to ponder

 

1.    How far is my rental property?

If your rental property is far away from your home or work, you will spend a significant time commuting. Factor the time taken each way as well as the fuel costs.
 

2.    What is the level of support you may receive from your family?

If you can divide and conquer the responsibilities of property management amongst your family members, you are one of the lucky few.
 

3.    How much is your time worth?

Add up all the hours you will spend every month managing your property and multiplyit with your hourly income.
If the pricing quoted by the property management company is cheaper than that, it is worth choosing a property management company instead of self-management.
 

4.    What is your ultimate financial goal?

 

“It is better to work on your business than work in your business

If your ultimate goal is to attain financial freedom faster by multiplying your rental income by increasing the number of investment properties you own, you should focus on that instead of managing the properties.
 
When you spend a lot of time in managing a property and since it is a very demanding job, you might eventually lose interest in investing more in real estate. The time spent prevents you from working on any of your side hustles.
 

5.    Are you a process person?

Managing your property on your own requires a lot of processes to be followed to a T. If you are not a process person, you can outsource it to the right property manager and focus on rinsing and repeating your investment journey.
—–
 
At Skybridge Property Group, we make it even simpler by offering a pricing to homeowners that is unbeatable.
 

5.6% of your Rental Income or $98 per month (whichever is lower)

 
You can save a lot by choosing Skybridge Property Group instead of our competitors. We have done the research so that you that you don’t have.
 
Use the calculator to find out your Monthly savings in Property management costs when you work with us.