You might be an expert when it comes to investing in real estate but barely a novice when it comes to managing those properties. To help make things easier and take care of your future tenants, you can hire a property management company. Just as you want to do a thorough check on the individuals who will be residing in your apartments, home or commercial building, you’ve also got to do a thorough check on your next management company.
Start with the Basics
Start off asking some basic questions. Find out how many years of experience the management company has, the types of properties it’s managed and how many units it’s currently managing. Always go with your gut, and don’t be afraid to ask for clarification whenever you feel it’s necessary. You have to remember that your chosen property management company can either make your real estate investment even better or reduce it to financial ruins.
Dig Deep in Details
Don’t forget to focus on the smaller details of managing a property. For instance, be sure to ask what kind of accounting statements you can expect from month to month and how you’ll receive rent deposits in your bank account. Find out if you’re dealing with a fully licensed property management company and if any contractors the owners work with have worker’s comp and liability insurance. You don’t want to find out later that you’re held responsible for accidents and injuries that take place on your property.
You’ll also want to swivel the focus back to your rental property while you’re interviewing management companies. Specifically, ask if your property is a good investment, if the area is improving and if there’s anything special about the area in which your property is located. You should also inquire about the average rate of vacancy in the area and specific neighborhoods in which the managment property would invest.
Pretend you’ve already agreed to allow the management company to handle your real estate investment. Be sure you find out:
- Your responsibilities
- The management company’s responsibilities
- The amount of authority you’re relinquishing in regards to controlling and managing your property
The agreement essentially spells out the type of relationship you can expect with the management company, so get a standard copy and read over it before you make a decision on which company to go with. Have a real estate lawyer look over it if you like in order that you know for sure what you might be getting into.
Don’t cut corners when it comes to how your property is managed. Remember that you’ll be depending on this company to help bring out the full potential in your investment.