Property management companies screen tenants every day. Who screens property management companies? Both tenants and landlords should check out a property management company before signing on.
Most tenants hand over their biggest payment each month to their property manager and count on them to be around when things go wrong. Plus, there are a lot of scammers out there ripping off people searching for a place to live. You should verify someone is legit before handing over your hard-earned money.
For rental property owners, screening the investment property management company is even more important. Hiring a property manager is one of the most important things you can do to help ensure your success as a rental property owner as well as give you peace of mind. This relationship is more like a partnership than a typical vendor relationship.
Your residential rental property manager represents you as a fiduciary, guiding and advising you as a housing provider. They collect money on your behalf, help look after your valuable asset while helping to navigate tenant relationships and complicated tenant-landlord laws.
Property management is hard. Fortunately, there are some good managers out there. You just want to make sure you are working with one of the good ones. That is why you want to start by screening them first. Here are six ways you should screen a property management company you are considering using:
Website
The simplest and perhaps most telling way to check out a professional property management company is to look at their website. It does not have to be fancy. You are not hiring a website designer; you are hiring a property manager. Remember, this is what they put out to the world to show who they are. They will be marketing your investment properties, so you might as well see how they market themselves.
You can learn tangible things like how long they have been in business, their location, the services they offer, and maybe a little about some key team members. More importantly, you can get a sense of their values and personality, which should give you some insight as to what they will be like to work with.
Reviews
Not all reviews will be “five stars”, especially in property management and that is OK. Google is the biggest with Yelp coming in second. Both have screening processes. Yelp seems to be more popular for upset people and is known for screening out positive reviews. Make sure there are more than just ten or twenty reviews. Anyone can have friends and family do a few reviews. Fifty or one hundred is a different story.
Check out the negative reviews. A bad review from a challenging tenant may sound good to an investment property owner. Look at how the business responds. These responses may be more telling than the reviews. Check out the Better Business Bureau too. They receive very few reviews but the BBB investigates the property management company to help ensure it is legit.
Social Media
The right property management company will at least have some kind of social media presence on Facebook, LinkedIn, Instagram, and even YouTube. You should check them out. These sites will give you an extra perspective that you would otherwise not get.
You may see pictures of an office party or find out about a charity in which they participate. These sites are often where you will see examples of advertising and what the leadership may think regarding industry best practices or new laws.
The Office
Checking out the physical office is one of the best ways to learn about a business. Sure more and more people work remotely but property management companies collect a large amount of money every month. Having a physical location helps show stability.
Remember, when paying online this represents the place your tenants will be paying their rent. Visiting the office will also show you something about who they are. Even though there will be people in the field and working remotely, you get more perspective by actually being there.
Department of Real Estate
In California, you need a real estate broker's license to legally operate a property management company. You should check with the California Department of Real Estate to make sure they are legally licensed and that their license is in good standing. You will be able to tell how long they have been licensed.
You will also be able to tell if they have any disciplinary actions against them. This is important with real estate sales but arguably more important in property management where the broker is handling your money.
Trade Associations and Professional Designations
Trade association directories are a great place to start looking for a good property management company. There is a variety of trade associations and professional societies depending on the focus. For standard residential property management, the National Association of Residential Property Managers (NARPM) is a great place to start.
Other associations include the National Apartment Association (NAA), Institute of Real Estate Management (IREM), Institute of Community Association Institute (CAI), and the National Association of Realtors® (NAR) to name a few. If a property manager is involved, in a trade association and has professional designations, it is evidence that they are working to stay current and they are serious about their career.
Screening the property management company is an important start. Of course, it is just a start. Property owners will also want to talk to them and ask some questions. For tenants, it is pretty straightforward. For Rental Property Owners it can be more complicated. For guidance on what to ask, please check out our blog on Thirteen Questions to Ask Before Hiring a Property Manager.
Bottom Line
Property owners should screen a local property management company before handing them money to rent a place and certainly before hiring them to manage their rental properties. You should check out their website, reviews, social media, the physical office, and the Department of Real Estate, to see if they are members of any trade associations and if they have any professional designations.
If they pass this first step. Then you need to have a conversation and ask questions. There is no such thing as a perfect property manager. It is a hard business working with problems every day. Fortunately, there are many great management companies out there and we hope that this helps you find one.
If you are looking for a reliable property management company or real estate broker in Long Beach, Los Angeles, or Orange County, California or you are just considering it and have a few questions about real estate contact the Mike Dunfee Group today! We are happy to help.
Dunfee Real Estate Services, DRE # 02026232
