QUESTIONS FOR INTERVIEWING PROPERTY MANAGERS?

The following list of questions is not meant for you to perform an FBI interrogation on your prospective property manager. If you copy and paste all of these questions and send off an email to a property manager do not expect a reply back. These questions are meant to be used   as a guide to give you direction. Between a 45 minute phone call, their management agreement, and lease agreement you will be able obtain the answers you need to have a solid   understanding of whether or not you have found the right property manager. Also, it’s always wise to interview two or three companies so you can select the best one and have a back-up just in case your first selection does not work out.

Marshall Reddick Real Estate prides itself in the quality of property management we provide our investors along with our reduced rates for monthly management and leasing fees for all Marshall Reddick investors. However, we are not in every market in the U.S., so you can use this as an outline to find a reputable property manager if you have a property outside of the markets we are in.

Always start the call with small talk to introduce yourself and get to know the person that will be your potential future property manager. It is very important you are not all business because you may work with this person for the next 10 to 20 years of your life. Give them the exact property address and the details of your property, the more accurate you are the better their advice and answers they can give you. Lastly do not forget to ask for 2-3 references (existing clients) before you finish your phone call.

CONTRACTS: READ, READ, AND RE-READ

 How long have you been in the property management business?

• How many units are you currently managing? How many are listed for rent?
• What does my start-up fee or leasing fee (if any) cover?
• What services are you providing for the fee of             %?
  1. Screen applicants
  2. Collect rents
  3. Placing ads (where?)
  4. Inspecting property
  5. Collect and hold security deposits
  6. Issue notices (to move, to pay rent, warning letters)
  7. Coordinate maintenance
  8. Coordinate specialty repairs/upgrades (new carpet)
  9. Pay bills (water/trash/gas/electric/mortgage)
  10. Disperse security deposit refunds/collection
• What did you do for work prior to this?
• How many employees (property supervisors, inspectors, book keeper, and leasing agents) do you have? (Do the math. If the company is over loaded, then there is a good chance your   property will not be adequately monitored.)
• How good is the area and is it close to freeways, stores, businesses?

1. How long would it take to rent my property?
2. What do you think my property will rent for on a monthly basis?

• Do your research prior to asking this question so you know the answer, and there recommendation is accurate.
• Before closing my property, could you do a walk   thru?

• You should have them give you a scope of work to the cost of making your property rent ready.

VACANCY QUESTIONS:

 Who will inspect my property before it is rented?

1. What is included on the inspection sheet?
2. Will photos be taken of the condition of the house prior to move in?
3. What are your density limits? (How many people per room are allowed)?
4. Who will pay for the utility bill or expenses while the property is vacant?

• It is ideal if the property manager handles this for you.

QUALIFYING APPLICANTS:

1. What are your qualifying criteria?
   • Income
   • Employment history
   • Credit (find out specifically what they require) not just “good credit.” Does that mean they permit people with BK’S? With court judgments , state liens, repossessions? How many negative credit lines do they allow? Ask for a copy of their qualifying criteria.
   • Previous rental history. Make sure they check current and at least one “past” history. The past one will show more details and ask the property management about the details.
   • Do they run a criminal background check?
2. Who pays for the background/credit check?

• It is standard for the tenant applicant to pay this $50 to $75

SECURITY DEPOSIT:

1. How much security deposit is required?
   1. How many days’ notice is the tenant required to give when moving out?
   2. Will I be notified?
   3. What happens after the tenant moves out? What kind of inspection is done? Are photos areHow is that security deposit used? Get specifics: “To restore the home to its original condition” is too vague. Ask if the charges are for:
      • Paint
      • Paint prep: nail holes, scratches, or black marks from
        1. Damages normal wear and tear. Ask them what their state law allows under normal wear and tear” condition.
      • How much time does the law allow for a Security Deposit Accounting?
      • What happens if the tenant ends up owing more than the security deposit?

       

      INSPECTIONS:

      1. How often is the property inspected?
      2. What happens if I want it inspected more frequently?
      3. What does the law say with regard to inspections?
      4. Could my property be rented as non-smoking?
      5. Who handles the builder warranty repairs?

       

       

      MAINTENANCE:

       

      1. How are maintenance costs itemized in the monthly statement?
      • You should get a copy of the invoices/receipts to substantiate any charges.
      1. Do they have their own (internal) maintenance team or do they sub-contract?
      • If they sub contract, you will probably pay higher rates if they mark up the fees. Are the workers licensed, bonded, and insured?
      1. What is the minimum dollar amount for a maintenance item that the property manager doesn’t need to notify you in advance for?
      • In most areas the standard is $250 , but most companies will let you negotiate that dollar amount, but not in all cases.
      1. Do they require any up-front maintenance reserve?
      2. What is considered an emergency maintenance call?
      • Charges are higher for emergency calls.
      1. Is the tenant charged for maintenance that is their own fault?
      • How do you collect those fees?
      • “Oh a Lego toy fell down the toilet”?
      • What are the average costs for cleaning?
      • What are the average costs for carpet cleaning?
      • Who will take care of the yard?

      COMPLAINTS AND VIOLATIONS OF RENTAL AGREEMENT:

       

      1. How are complaints handled?
      • Look for answers such as “We issue Perform Covenants or Quit” or “We issue 30 Day Notice to Terminate Tenancy”
      • If the tenant continues to violate the agreement, what steps do you take to have them removed?
      • After notices to pay rent are issued, what is your next step in either collecting the rent or evicting the tenant?

       

      MOVE OUTS:  

      1. How many days’ notice is the tenant required to give when moving out?
      2. Will I be notified?
      3. What happens after the tenant moves out? What kind of inspection is done? Are photos are

      taken of the condition of the house at move out to compare to move in? 4. Who conducts the walk-thru with the tenant before he/she moves out?

      • How soon after the tenant vacates the property will it be scheduled for maintenance/painting?
      • How long does it take on an average for a property to become rent ready?
      • How long before it is advertised?
      • What steps do you take if it is not rented within one month?
      • Never agree to a move-in special with “no security deposit”

       

      How often is the property inspected?What happens if I want it inspected more frequently?What does the law say with regard to inspections?Could my property be rented as non-smoking?Who handles the builder warranty repairs?

OTHER CHARGES YOU SHOULD KNOW ABOUT 

1. 1. Advertising – Where do they advertise and what is the approximate cost if any?
   2. Inspections – Do they charge for inspections other than “routine” (i.e., tenant complains they see termites. Management Company contracts for termite inspection and the Management supervisor has to meet the inspectors at the property). Will they charge extra for this?
   3. Leasing Fee – Most property managers charge a one-time fee once they procure a tenant, and that fee is taken out of the first month’s rent. In most markets that fee is 50% of the first month’s rent, but it’s not unusual to see as much as one full month’s rent. The network does a great job to keep this cost down below average.
   4. Lease Renewal Fee – How much do they charge if the tenant renews their lease?

   And remember if you are unsure of something or get flustered, sticking your head in the sand and hoping it will go away will only make it worse. Whenever you are dealing with property management or tenant issues you need to act quickly and get good advice on what to do. Pick up the phone and contact a Marshall Reddick Real Estate Advisor. If they have not personally gone through a similar situation with one of their rental properties, you can be sure that someone in the office has and that you will get you an educated and cost effective answer within 24 hours.

   Is the rental agreement month to month or a lease?When is the rent due? When is it considered late? What are the late fees and who keeps the late fee? oes the rental agreement hold the tenant responsible for exterior maintenance; that is to water and maintain the grounds? Who is responsible to mow, trim, and otherwise maintain the grooming of the property? Who pays water , trash, and other fees?When does my statement and rent check arrive each month?