Honest Realestate Agent

Should you need to hire a professional property management company then the profitability of your property boils down to whether you hire a good or bad company.

Hire the right management company and you will have a lucrative rental. The wrong property management company could cost you thousands of dollars a year in rental income and repairs from a bad tenant.

A big mistake owners make is that they just randomly pick a property management company from the phone book without doing research on the company first. With a little research, you can avoid hiring a bad management company.

Watch out for those big “we do it all” real estate firms that span across the country. They do property management because they want to be the first company you think of when you want to sell your property. Many of these corporations use property management as simply a tool to get their foot in the door with you so that they can try and convince you that you need to sell your home. It’s never a good idea to go with a property management company that is trying to get you to sell your home because that’s where they make the big money. You want a management company that specializes exclusively in property management and not something else. You don’t want a big corporation either. You want a property management company that specializes exclusively in property management in your local markets. You want a property management company that specializes in your local market only.

Try and get three references from the property management company. You want to talk with other owners who are satisfied with the property management company. You should not sign any contract with the property management company before knowing their track record. Ask for several references that you can contact. Call the references and make sure to ask if they know someone who works for the management firm. Ask them what they dislike about the company.

Use the Internet to make sure the property management company and its employees have the necessary licenses and that they are in good standing. Most states require property managers to have a real estate license and/or a property manager’s license. Most states require a property manager to also have a real estate license if they are dealing with single family homes.

Make sure that the property management company is insured. The company should have general liability insurance, professional liability insurance, and workers’ compensation. The management firm will be dealing with your renters and collecting their deposits and rents so make sure they have employee theft insurance.

The second biggest goof that owners is make is that they don’t ask the property management company the right questions before signing a management agreement.

Here is a list of questions you need to ask when interviewing a management company:

1 – Can you provide a list of exactly what management services are provided?

2 – Do you sell homes or make money on referring me to a real estate agent?

3 – Can you provide a list of exactly when I will receive income checks and reports?

4 – Where will you advertise my home and how much will it cost me to advertise there?

5 – How do you handle maintenance requests from tenants?

6 – Who will manage my property? What are his qualifications? Is he licensed? How many houses does she currently manage?

7 – Can you give me three references that I can call? I would like the references to be from people who have homes that are managed by the same person who will be managing my home?

8 – Do you have a maintenance division and if so, do you only charge the actual cost of labor and materials without any markups? Can I opt out of your in-house maintenance division and have repairs done by external companies only?

9 – Do you get volume discounts with your vendors and do you pass on that savings to clients without any markups?

10 – How do you handle late charges? If I keep the late charges, are you charging me a higher monthly management fee?

11 – Do you have insurance on employee errors and theft and specifically do you have an Errors and Omissions policy that covers at least 500,000 and on your general liability policy does it cover at least 2,000,000?

12 – Do you have a 500,000 Fidelity bond and a Forgery and Alterations policy of at least 25,000 for all employees?

Do you co-mingle different owners’ funds into one account and did you know this is illegal in most states because of pyramid type schemes that property management companies have run in the past?

I hope this article helps you should you choose to look for a professional property management company to manage your home rental. If you have property in Fresno California and are searching for a professional property management service, see Fresno property management

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