Examining the Organization: Background, Qualifications, Portfolio

The service you receive from a property manager will only be as good as the people doing the work. This step is critical in ensuring that you hire honest, knowledgeable professionals who will be attentive to your needs and the needs of your tenants.

Here’s a list of issues to review and questions to ask any property management firms that you interview.

Background

How long have been in operation? Under this name or under a different name?

The rule of thumb is to look for 5+ years of experience. But this must be weighed against other criteria, as there are subpar veterans and excellent startups in many markets. Also, beware any company that has changed its name to avoid a bad past.

Have you been doing property management that whole time? Have you been managing my type of property that whole time?

Property managers who focus on one property type and/or don’t provide realty services pride themselves on this point. There are definitely benefits to working with a company that has a single focus and specialization, but there are plenty of competent property management companies who provide realty service and/or manage multiple property types. The main thing to look out for is people who decide to become property managers overnight, even though they’re unqualified. Although this applies to people from all backgrounds, it’s worth noting that when the real estate market slows down, a good number of Realtors® moonlight as property managers—some of whom lack the proper licensing and skills required.

How knowledgeable are you?

If they appear to not have the time to answer your questions in the interview process, move on. They either don’t have time for their clients, or this is a front to mask their lack of knowledge. Offer some hypothetical scenarios to see if they offer solid answers or dance around the questions. Quick, clear answers mean there are solid processes in place. 

Qualifications

Are you licensed to practice property management?

This is a very important point, as it’s a serious problem when anyone tries to practice property management without being licensed and educated in the field. The fact that your property management company is licensed means they’re subject to the ethics and guidelines established by their state’s governing authority. If they don’t have a broker license, they’re likely either operating under another broker’s license or are in a state that doesn’t require one. Either way, it’s worth checking the laws in your state to make sure you don’t hire a company that’s practicing property management illegally. Also find out if they have a current Errors and Omissions insurance policy.

What certifications do you and your employees have? Do you participate in continuing education?

This is a good indicator of how seriously the company takes its work. You want companies that nurture their employees’ professional development by encouraging (or better, requiring) them to attend graduate-level courses and seminars. Professional certifications mean that the recipient has invested considerable time and money acquiring the skills to be an expert in their field. Here are some trade organizations and the designations they provide:

• National Association of Residential Property Managers (NARPM)
• National Apartment Association (NAA)
• Institute of Real Estate Management (IREM)

Consider it a bonus if the above certifications are complemented (not substituted) by related real estate management designations. This shows an even broader skill set, which further informs their property management practice.

Does your management team dress and act professionally?

First impressions matter. The companies you interview are likely on their best behavior during the interview process, so if they don’t look and behave professionally then don’t expect things to improve. Consider that this person will represent you when dealing with current and potential future tenants. If you don’t find them agreeable, then what are the odds that your tenants will? It’s also a good idea to get a look at their offices, as this will provide yet another window into what kind of property conditions they find acceptable.

Portfolio

How many types of properties do you manage? Do you have a specialty?

Generally speaking, it’s a good thing if they specialize in one area.

How many properties do you currently manage? Are you trying to grow, hold or slim your portfolio?

This question is closely related to size, which is covered in the next post [link here?].

Do you manage properties locally, regionally or nationally?

The conventional wisdom here is that “local only” is best, because it shows focus and greater management attention, and it means that the firm is more likely to meet your needs and provide access to decision-makers in the company. The truth is, this can be an overgeneralization that’s easily outweighed by other factors covered in this hiring guide.

Do you manage any Section 8 properties?

These kinds of properties come with their own challenges and require specific knowledge to manage. If you currently own or are considering purchasing a Section 8 property, you’re better off looking for a company that has experience in this area.

How long is your average client relationship?

Longevity is always a good sign.

Can you provide addresses for some of your properties so I can do a drive-by and possibly a walk-through?

If the property managers says yes, bear in mind that they’ll select properties that reflect well on them. If you really want to go the extra step, you can hunt down one of their other properties by locating some of their rental listings. Either way, if you get the opportunity to talk to tenants, try to assess their level of satisfaction with the management company.

Where is your office located? How far is it from my rental property?

The farther away they are, the less likely they’ll be to truly pay attention to your property. A good rule of thumb is a 25-minute drive, max. 

There‘s more ground to cover here, so we’ll continue this topic in the next post.

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The Realty Medics are the nation’s leaders in “Rocket Science Renting”: Rocket Science Renting is about keeping your life simple by letting someone else handle the complex work of property management for you. It’s knowing that your property is running smoothly, with no hiccups or glitches. It’s hyper-responsive customer service that gives you property management peace of mind. It’s advanced technology that could only be designed by a former NASA engineer like our owner, Ben Sencenbaugh. And it’s knowing that you’re always getting maximum value and ROI for your investment.