When searching for a property management provider to represent your investment rental property, having a common set of questions to ask can help you evaluate which firm is best. In this article, we review 10 Questions to Ask Property Managers and why the answers will help you make an informed decision.
- How long has the property management company been in business?
The longevity of a property management company is crucial as it reflects its stability, experience, and ability to withstand market fluctuations. A company with a long-standing presence in the industry is more likely to have established reliable systems, strong vendor relationships, and proven strategies for effective property management. Lindsay Leasing was established in 2011. Read more about our founding principles. - How long has the property manager you are talking with been doing property management?
The experience of the property manager directly impacts the quality of service you can expect. A seasoned property manager brings valuable expertise, problem-solving skills, and industry knowledge to the table. Their years in the field indicate their ability to handle various situations efficiently and effectively. The broker for Lindsay Leasing began her career in 2008. Read more about her background here. - How many properties do you manage and can I get references?
The number of properties managed by a company gives insight into its capacity, workload, and efficiency. It is essential to know if they can handle your property effectively without being overwhelmed. Reviews provide firsthand accounts of client satisfaction, service quality, and overall performance. Companies with too many properties may be overwhelmed. Lindsay Leasing is a boutique firm with a strict property to broker/agent ratio. See our Google reviews here. - What kinds of reporting and information do you provide in connection with managing my rental property?
Among the 10 questions to ask a property manager, this question in particular, will provide insight as to how efficiently the company runs their business. When managing a rental property, having access to comprehensive reporting and information is crucial for property owners to stay informed and make informed decisions. Property management reports provide valuable insights into the performance of the property and the effectiveness of the management company. Most firms will provide monthly statements and annual reports with year-end tax forms. At Lindsay Leasing, we go beyond the periodic static reporting by providing you online access to reports on demand with near real-time data. All reports let you sort, search, and export as Excel or PDF. In addition to reporting, we also store all your vendor invoices and other property related information online.
- What is your marketing program for my property?
Understanding the property management company’s marketing program is essential for attracting quality tenants and maximizing rental income. A robust marketing strategy should include a diverse mix of online channels, professional photography, detailed property listings, and responsive agents who respond to inquiries, thereby reaching a wide audience and minimize vacancies. Scrutinize rental agencies who do not use the Sarasota-Manatee county Multiple Listing Service (MLS) - What is your criteria for qualifying applicants and do you do it in-house?
The screening process for potential tenants is critical in protecting your investment and ensuring reliable rental income. Knowing the property management company’s criteria for qualifying applicants, such as credit checks, rental history verification, and income requirements, helps in selecting responsible tenants who are likely to fulfill their lease obligations. Ensure that the firm follows federal and state fair housing regulations. Lindsay Leasing is annually credentialed to perform background credit checks in-house, enabling us to turn applications quickly. - What percentage of your tenants renew their lease each year?
Tenant retention is a key indicator of tenant satisfaction, property management effectiveness, and overall success. A high percentage of lease renewals signifies a well-managed property, positive tenant relationships, and consistent rental income. It reflects the property management company’s ability to maintain tenant loyalty and provide a desirable living experience. Look for an agency who has at least a 50% renewal rate, but also look at overall tenue of leases because the longer the tenue the lower your amortized tenant procurement fees. The national renewal rates were 60% in 2023. At Lindsay Leasing, 70% of our tenants renew their leases. More importantly, within our renewal base, about 1/2 our leases have a tenure of 2-3 years, and 1/4 of our leases have a tenure over 3 years. - What do you charge for management, leasing, and are there other fees?
Understanding the fee structure of a property management company is crucial for budgeting and evaluating cost-effectiveness. Clear information on management fees, leasing fees, maintenance charges, and any additional fees ensures transparency and helps in comparing services and costs with other providers. A good way to compare fees is to setup a spreadsheet and list the types of fees and their payment frequency for each property manager. This way you can get the total picture of their services and their associated costs. Lindsay Leasing offers a subscription plan that is a flat percentage of rent for all services rendered. This makes it easy to forecast what your cash flow will look like under different rent scenarios. - What happens if a tenant does not pay rent?
Having a clear understanding of the property management company’s procedures for handling rent delinquencies is essential for protecting your investment and maintaining cash flow. Knowing how they handle late payments, eviction processes, legal compliance, and communication with tenants in arrears ensures proactive management of financial risks. Electronically paid rent is always paid when due versus checks that depend on when the tenant mails it and the mail service delivery timeframe. If rent isn’t paid on-time, the property manager must contact the tenant and work it out. If rent is still unpaid, then a notice to pay rent or risk being evicted must be posted. Lindsay Leasing does not accept rent checks and only collects rent by direct bank draft resulting in 99% on-time rent payments. - What makes you different or why should I choose you?
Identifying what sets a property management company apart from others helps in determining their unique value proposition and suitability for your specific needs. Factors such as personalized service, innovative technology solutions, proactive communication, industry certifications, or specialized expertise can differentiate one company from another and align with your preferences and priorities. Ultimately, look for a property manager who you enjoy working with as this individual will become the most important contributor to your investment’s success. At Lindsay Leasing you will work directly with the principals and never handed off to the agent on duty.
These 10 questions to ask property managers can help you vet a property management company that aligns with your goals, expectations, and investment objectives.
