Property management firms are as varied as the properties they serve. Just as you’d vet a tenant, you need to vet every prospective property management company in Lakeway that you’re considering. This is particularly important if you’ll be out of state and unable to meet with them in person on a regular basis. In that spirit, here are the most important questions to ask a property management company.
How Long Have You Been Managing Properties in This Region?
Perhaps one of the simplest and most obvious questions to ask a property management company is almost among the most valuable. You want to know how much industry experience this firm has. You also want to know how long they’ve networked in this region. A decade of experience in another state does you no good when the local network often determines service prices and availability. This also tells you how valuable their references are and how many you should expect.
How Many Units Do You Manage? How Large Is Your Staff?
These two questions to ask a property management company go hand in hand. It’s important to know the total number of properties. A small company isn’t necessarily a bad choice, but a company with a hundred or more units often has many resources and an extensive network at their disposal. Knowing the number of managers and support personnel ensures that the staff isn’t stretched too thin.
What Associations Do You Belong To?
Associations tell you a lot about a property management service. BBB membership provides insight into how clients and tenants view them. Memberships with NARPM, local Realtor associations and so forth demonstrate that the company is both well-respected and well-connected.
What Insurance Coverage Do You Carry?
Property managers should have general liability insurance along with errors and omissions insurance at a bare minimum. The best companies carry far more than that. Before asking this question, be sure to speak with your own insurance provider about what coverage you should expect.
How Many Evictions Do You Process Each Year?
This is arguably the question that prospective clients don’t ask property managers in Lakeway often enough. This provides insight into how effective a company is, and be sure to consider it in context. A company may only average two evictions a year, but that’s a lot if they only manage a dozen properties. A management firm with a high eviction or turnover rate is an indication of a vetting process that’s underperforming and will likely hurt your bottom line over the long-term.
How Many Vacancies Do You Have? What Is Your Average Fill Time?
Along with questions about evictions, these are questions to ask a property management company that arguably aren’t asked often enough. The goal here is to determine the turnover rate and how fast those vacancies are filled. A high turnover rate indicates problems with the vetting process and a slow fill rate indicates problems with the marketing process. Be mindful that even though most companies waive some or all fees during vacancies, you’re still losing money. Also, note that turnover rate must be considered in context. A college town, for instance, will inherently have a higher rate.
Do You Charge Fees When the Property Is Vacant?
Some fees may still be required while a property is vacant. After all, the need for upkeep doesn’t just disappear because people aren’t living there. A property management company’s costs may not even drop significantly during a vacancy. On the other hand, ensuring good tenants is their responsibility, and there should be some motivation for them to fill that property as soon as possible.
How Do You Market Properties and Screen Tenants?
If a property management company has a low turnover rate and fast fill rate, then you can probably assume their marketing and screening techniques are strong. Nevertheless, you should know if they’re taking advantage of all available resources, such as MLS real estate listings. You should also know what to expect going forward and may learn things about your area you didn’t know.
What Are Your Management Fees? Are There Any Additional Fees?
Aye, there’s the rub. You obviously want to know what the services cost. You also need to know what is included in the plan and what costs more. Some companies, for instance, charge a fee for marketing when it’s a new property or they’re within turnover norms. Determine the going rates in the region for content, and you need to decide whether a more comprehensive or selective tact is right for you.
Is Real-Time Data Available? How Often Are Reports Generated?
Any discerning property owners want regular information about their properties, and you need to determine how the management company will provide it to you. Real-time information available online is becoming increasingly common. You should also expect reports, and some firms generate their reports or different reports on a weekly, monthly or quarterly basis.
How Are Maintenance and Repairs Handled?
The last but not least question among our questions to ask a property management company is how regular maintenance and repairs are handled. Many of the larger management companies have an in-house team that handles regular maintenance and many repairs. That way, specialists only have to be called in when absolutely necessary. A company with a less structured approach to maintenance and repairs may result in higher costs for you.