Hiring a property management company is a big decision. A good property management company can make your investments more profitable and remove the stress of dealing with problem clients and legal troubles. Having a bad property management company is worse than going without one at all, so it's important to make sure you make the right choice.
According to Bluestone & Hockley Real Estate Services, there are certain questions you need to ask prospective property management companies:
How long have you been managing properties? Experience is important in a game with as many moving pieces as property management.
What is your current vacancy rate? Their current vacancy rate is reflective of what you can expect in the future. It can be helpful to compare this number from several firms.
Do you have your own maintenance crew? As long as fees are reasonable, this is a definite plus.
What kinds of properties do you manage? Generally, property management companies that manage fewer types of properties will be able to specialize and provide better service. If the company does manage multiple types of real estate, ask what type is their specialty before you tell them what kind you own.
Do you manage property exclusively? Or do you also provide brokerage services?
Same idea as before. Specialization is important in making sure you get the service you need. While there are competent firms that do both, there are also lots of realtors who jump into property management as a side project without committing enough time and energy to provide adequate service.
How often do you send out reports and checks? This should happen once a month. Anything less is not acceptable.
How often do you have to evict tenants? Good property management firms still have to deal with evictions, but at a lower rate than those that do a poor job of screening tenants.
What are your fees? Shop around and make sure you aren't going to be overcharged.
How does your management contract deal with contract termination?
You want to make sure you won't be penalized for early termination if you aren't satisfied with the service you receive. Check over the contract carefully to look for hidden fees.
Are you licensed? If they say no, walk away.