As a landowner there are times we may consider renting a piece of property, whether single house or a multi-unit apartment complex. When a person contemplates such a concept one of the primary questions will be, should they manage the property themselves or hire a professional management company. If a person chooses to manage the property themselves they will be responsible for all management aspects of the property including items such as maintenance, lease agreements, marketing, etc. On the other hand, by choosing a professional management company, all of the mundane tasks of managing the property will be placed in the hands of a professional. This is one of the primary reasons large and small landowners utilize property managers. Once a decision has been made to use a property manager, the owner must investigate that manager to make sure they are qualified to manage the property.
Legal requirements
Surprising as it may sound there is not a great deal of continuity between the states regarding property managers. Some states require that a property manager be a licensed real estate broker or at least an agent. While other states require the person to be, a licensed property manager, regardless if they are real estate professional, licensed to sell property in the state. Thus, as the landowner your first responsibility when choosing a property manager is to make sure that they are legally allowed to manage property in your state. You can check into this requirement by contacting the state business agencies to see what the requirements are. However, asking potential property managers would be another avenue, as the potential property manager would not be building credibility with you if they lied about the legal requirements in the state.
While there are legal requirements for the states, there are also potential associations, which can certify a property manager. These organizations train people, either through online programs or through other forms of continuing education to obtain their property manager certifications. Additionally, these organizations will be fully aware of the legal requirements that a manager must possess in order to manage property in a given location. The following list is some property management associations in the US and they can be your first starting point in checking the qualifications of a potential property manager:
- Property Management Association
- National Property Management Association
- National Association of Residential Property Managers
- Institute of Real Estate Management
Interviewing a property manager
Once you have examined the legal requirements of the property manager, the task is only partially complete to choosing a qualified property manager. The next aspect should be to investigate through an interview, the operational qualifications of the perspective manager. Through the interview process, you will be able to determine whether your potential property manager can handle your property with little oversight from yourself. There are several questions to ask a property manager, which are posted on the Internet and any property owner should contemplate all possible questions of their perspective manager. However, some of the main questions to ask a potential property manager would be the following.
What is their procedure for maintenance issues? The reason to ask this question is that besides the negotiations of lease and marketing for a piece of property the next most active aspect of property management is maintaining the property. You want to find out if they use licensed contractors, professional handymen, or potential brother-in-law who happens to know how to maintain a property. Whatever the answer may be it will give you insight into how the property manager looks and treats a property. The best answer will be one that suits your personal taste and requirements and how your property will be treated. The brother-in-law option might be just as qualified as a licensed contractor option, with the main determinant being your comfort level with the solution to the maintenance issues that the property manager proposes.
Another question to investigate is their competency for managing your property, will be how they handle leases. In this regard, a lease is both the marketing, collection of money, and long-term management of the relationship with the tenant. Thus, you want to ensure that they will properly treat your tenants, as they are your representative to those tenants. Additionally, you will want to determine how they manage the receipt of funds for rent and deposits. Are they placed in an escrow account and then transferred to you or are they immediately placed into one of your business bank accounts. Obviously, because this is dealing with your money, you want to ensure that you are fully comfortable with their money handling abilities. Finally, while you are discussing the finances with your potential property manager, you will want to find out how they are paid. Some property managers require a fixed fee for managing a property, while others will take a portion of the rent as payment for their services. As a property owner the method that best suits you and makes you feel comfortable will be the best method to utilize.
