In addition to your own home, your rental property is likely one of your most valuable assets. Thus, choosing a professional property manager to help protect this asset and help you get the most from your investment over the long term is a decision that takes careful consideration. While anyone can claim to be a property manager, there are a number of factors that separate top notch property managers from the amateurs. Here are some qualities to look for.
- Licenses, Certifications, and Professional Affiliations
Depending on the state where your property is located, property managers may or may not have to be licensed. In some states, property managers may only need to have a real estate license to manage properties. Reputable property managers who care about their credibility in the industry will have appropriate licenses and certifications for the members of their team. There are a variety of licenses and certifications that are based around providers’ roles and responsibilities. Ask property managers you’re considering hiring which licenses and certifications they have, and also whether they are members of any professional associations, such as the National Association of Realtors.
Examples of property management licenses and certifications include:
- Real estate broker license
- Real estate sales license
- REALTOR certification from, and membership with, the National Association of Realtors (NAR)
- Certified Manager of Community Associations (CMCA) issued by the Community Association Managers International Certification Board (CAMICB)
- Member of The National Association of Residential Property Managers (NARPM)
- Residential Management Professional (RMP) provided by the National Association of Residential Property Managers (NARPM)
- Master Property Manager (MPM)
- Certified Support Specialist (CSS)
- Certified Residential Management Company (CRMC)
- Preferred Residential Management Company designation (CRMC)
- Certified Property Manager (CPM) provided by the Institute of Real Estate Management (IREM)
- Accredited Residential Manager (ARM)
- Accredited Commercial Manager (ACoM)
- Accredited Management Organization (AMO)
- Certified Apartment Manager (CAM) provided by the National Apartment Association (NAA)
- Certified Apartment Portfolio Supervisor (CAPS)
- Certificate for Apartment Maintenance Technicians (CAMT)
- National Apartment Leasing Professional (NALP)
Your property may be insured and your tenants may have renters’ insurance, but you’ll also want to make sure the proper manager you select is property insured. Property management insurance includes:
- Property casualty insurance
- General liability insurance
- Error and omissions, or E&O, policies
- Experience Managing Your Type of Property
Types of rental properties range from commercial spaces to single-family homes, ADUs, luxury properties, condos, multifamily apartment buildings, older buildings, brand new developments, and others. The laws that govern different types of rental properties vary, as do the types of tenants who occupy them and the kind of maintenance they require.
This is why it’s so important to choose a property manager that has deep experience managing the type of property that you want to rent. Your property manager needs to be up to speed on the rental laws and policies that govern your type of property in your given geographical area. In addition, your property manager will be responsible for marketing your property to potential tenants, so they need to understand how to reach and communicate with the types of people who would be your ideal tenants.
You’ll also want to choose a property manager that has at least a few years of experience under their belt managing your type of property. Like any professional services industry, there is no replacement for experience counts when it comes to property management.
- Assets Under Management
As a testament to their experience, the best property managers will have a portfolio of assets under management. Just as you wouldn’t choose a financial planner who didn’t have a healthy portfolio of financial assets they manage for clients, you don’t want a property manager doesn’t have a healthy portfolio of properties they manage. Asking a potential property manager about other properties they manage is a good way to gauge their experience. It’s also fair to ask how long their typical client relationships are. Happy clients will stick with a quality property manager for the long term.
- A Property Management Agreement that Protects You, the Owner
When you work with a professional property manager, you’re entering into a business partnership, so understanding the terms and ramifications of your business agreement is essential. You want to be clear about the property manager’s role and responsibilities, as well as the level of service they’ll provide, and all costs and fees.
Typically, the responsibilities of the property manager, which should be outlined in your agreement, include:
- Responding to tenant maintenance and other requests in a timely manner
- Being responsible for the successful resolution of any tenant maintenance requests or other issues
- Marketing the property and keeping vacancy rates low
- Screening potential tenants
- Collecting deposits and rents
- Handling move-ins, move-outs, and evictions
Your property management agreement should also cover in detail all fees, how things like maintenance will be paid, how disasters will be handled, and beginning and end dates for the agreement itself. Above all, the agreement you sign with the property manager should protect you and your property.
- Tenant Lease Agreements that Protect You, the Owner, and Your Property
One of the benefits of working with a professional property manager is that they are well-versed in dealing with tenants. Often, they will provide and manage any changes to the leasing agreement with the tenant. It’s important that you are familiar with the leasing terms and that they’re written according to your needs and desires. Whether it’s a pets policy, amount of deposit, how maintenance is requested, and other items, the lease should be designed to protect you and your property.
- An Excellent Reputation and References
Like other professional service providers, the best property managers will come with excellent references from current and past clients. Independent review sites like Yelp and social media are places you can go to gauge a property manager’s reputation in the industry. But nothing beats a referral from someone your trust and a direct conversation with a past of current client.
In addition, you can refer to your local Chamber of Commerce and/or the Better Business Bureau to see if there are any complaints against the property manager.
Finding a great property manager does require some up-front due diligence. But this investigative process in the beginning will help you choose the best professional for your needs. Some extra work up-front will pay off in worry-free property ownership over the long-term.