Guide to Hiring a Property Management Company
Once you have decided that you want to hire a property management company for your investment in Orlando, it is crucial that you do your research before you settle and sign a contract with one. You need to compare the options based on the essential qualities of a property manager, which include organization, experience, and honesty.
An excellent and reliable firm can become a great asset since the manager will take care of your properties to make critical decisions. With several companies around that serve Central Florida, you want to make sure that you will land with the best company. Here are the strategies that you should execute to find the one that best fits your needs and your property’s welfare:
Look for Referrals
Gather a list of Central Florida property management firms from other property owners or local resources. Ask these people whether they are satisfied or not with the company and if they have had some problems. Note that referrals can be biased, so it is helpful if you get them from different sources. You will most likely hear something good (or bad) about a specific firm, which has a higher chance that it is real.
Search for Property Managers Online
The web is a powerful tool that you can use to look for companies that provide property management services in your area. You can check the company’s website, reviews, and other details about it before you start interviewing the property manager. You may also want to read about the complaints filed against the business if there are any. You can use the companies you have obtained through referrals, and you can compare them against your online research.
Note that the companies who show up first in search in Google or Bing are not necessarily the best. They may be paying more for their marketing to get greater visibility, but the ultimate test in a property management company is whether or not their current customers have had a good experience or not.
Assess Their Present Work
If you can, try reviewing the actual properties they handle. All of them should be clean and look well-cared for. If you need more information, it does not hurt to talk to the tenants of the properties they currently manage. After all, one of the priorities of the property manager is to keep your tenants happy.
It means that the complaints, as well as the repairs and maintenance, should be addressed right away. You can tell if the tenants are happy if they plan to sign a new lease.
If you're local, go ahead and drive by these properties. How do the exteriors look? Is it well cared for? Is there trash laying around? These can all be yellow flags.
Interview the Property Managers
By now, you may already have some good candidates that you would like to hire to supervise your investments. However, before you choose, make sure that you take some time to talk to the prospective people who you think will manage your property. This method allows you to compare each of them with one another to find the right one that you are most comfortable with.
This strategy is also useful in separating the good managers from the bad. You can utilize this opportunity to grasp which among the candidates have real knowledge with a plan tested against time. For instance, one of the duties of a property manager is to screen tenants. If he or she has placed 10 in the last two months but is planning to evict half of them, it could be because he or she has the worst luck or is not knowledgeable enough in screening tenants properly.
The candidate should also be receptive and not dismissive of your questions. You can see who puts his or her best foot forward during this time. If you notice that there are a few who do not welcome your questions and are not willing to spend the time to converse with you, things will likely get worse if you choose them.
During the interview process, it also helps to know the following:
- Property management services provided
- Educational background
- Experience (how many years, where they served, and others)
- Whether or not they understand the law about landlord and tenants
- Fees charged
You will agree that the prices are among the most important topics to talk about during an interview. Compare how the other companies are charging, along with the scope and the quality of the services they provide.
When you find a company that offers a lower price than the others, it may be an acknowledgment that their services are not up to par with their competition. Another reason is they only want to gain more customers, so they undercut the other businesses. Although a low-priced company may be attractive for you, some problems may arise, including:
- It leads to small margins, which lessens the ceiling on the service quantity and quality.
- They will find other ways to remain profitable.
- The managers can become overloaded with many properties just to make up for the low price of their services.
Just remember that you always get what you pay for in real estate as well as in hiring a property management company. Aside from the fees, owners entrust the managers with handling the rental income and reserve funds among many others. When you interview the potential company, make sure you ask the following:
- When will the manager deliver the payment to the owner?
- Will the pay be for that specific month or will the firm hold back one month before releasing the money?
- Can the manager provide direct deposit to the account of the owner?
- Will the company offer an IRS-1099 as well as a summary profit? How about the loss statement, which will be used for tax purposes?
- Can the company advise the owner about tax deductions?
- Does the company keep documentation and records in detail?
- Will they send out reports? How often and can they be viewed online?
- How do they manage security deposits?
The property manager indeed has huge fiscal responsibility. Therefore, it is a good idea that you ask as many questions as you can that are connected to the funds of the tenants and yours as well.
Another significant topic to talk about during the interview is the rental rate. Ask the manager how the company determines the prices. There is a smart way to maximize rental income, and it is achieved with the right knowledge of the local market. Substantial research is required so that your property has the correct rental rate and your property’s value is not affected.
Rates can rise, and you can also ask how often they would do so. Typically, a survey should be performed first – at least annually. Collecting rent is also an essential subject. Direct debit is a big plus for the management company. Most of the tenants in Orlando just want to pay through bank or online. It can save time and even money while improving cash flow. Processing the checks becomes fewer and can also be eliminated entirely. American Dream Homes utilizes an online management software that takes care of all this for our landlords.
If they accept checks, you can ask them how they deal with bounced ones as well as delinquent payments.
You should also be ready to talk about maintenance and repairs with the potential property manager. Remember to inquire how the property manager tracks maintenance requests from the tenants. Often, a software solution can be a great help here where the residents directly submit their applications online. Other related questions to ask are:
- How does the property manager handle emergencies and after-hours requests for maintenance?
- Who would control those requests?
- Does the company have preventative maintenance in which the manager helps in maintaining the value of the property by making sure small issues are fixed to avoid them from becoming larger and more expensive?
- Does the firm have its own maintenance crew?
- Will the company let the tenants perform some maintenance or repair tasks?
These questions will allow you to determine what to do next, especially if you are ready to hire the property management company for your investments.
Final Tips
It helps if you have interviewed at least three different Central Florida property management companies so that you can compare them with one another. It is also pertinent that you check whether or not the managers, as well as the members and the whole organization, are licensed and certified.
You should trust your instincts when hiring the right company. Sometimes, even the licensed ones do not provide reliable services. Before you sign, make sure that you have read and understood the terms of the agreement between you and the company. This way, no problems in the future will arise, and you can be assured that you have hired the best firm for the job.
If you have any questions or need any assistance, please do not hesitate to give our American Dream Homes property management company a call!