In today’s economy, investing in a rental property can be a smart decision, given not only the capital gain, but also passive income earned. Demand for rental property across the country is still high, with about 35% of all U.S. homes being renter-occupied.
That said, making the most of a rental property investment requires the owner to choose the right property manager for their needs. This is harder than it may seem, as property managers come with a wide variety of fees, levels of expertise, and service offerings. Here are four key questions that a California rental property owner should ask a prospective property manager at the interview.
1. Are You Licensed?
Before doing anything else, confirm that the candidate has an applicable real estate license in California to manage properties. The license serves as proof that the manager has obtained the necessary knowledge to manage real estate. Other than a license there are trade organizations such as the National Association of Residential Property Managers (NARPM) that offer additional certifications. Property managers that belong to NARPM adhere to a code of ethics and best practices within the industry.
Note: A license can be verified, and background checked, through the California Department of Real Estate https://dre.ca.gov/
2. What Services Do You Offer?
Many property managers offer a full suite of services, from marketing a property to setting rental rates. They also deal with property maintenance, screening tenants, leasing and rent collection. A good property manager will also be familiar with landlord-tenant legalities, including eviction notices, property litigation, and financial statements.
Some property managers focus exclusively on leasing and managing procedures, and will hire contractors for everything else or require the owner to provide. It’s best to find a manager that offers a range of services that can fit a variety of needs now and or in the future.
3. How Do You Set and Collect Rent Payments?
Good property managers keep track of what’s going on in the rental property market. It’s important to know trends (what renters look for), location amenities, vacancy rates, and so on. By keeping up on the rental property market on a regular basis, property managers can ensure they set competitive rental rates, and highlight key selling points of a property given current trends.
As for collecting rent, it’s a good idea to select a manager that allows tenants to make online rent payments. Without this option, late or missed payments are more likely to occur.
4. What Does Your Screening Process Look Like?
Property managers have access to a variety of screening products, from background criminal checks to previous landlord references. Additionally, credit checks are good indicator of payment timeliness. Find out how a prospective manager intends to determine the right tenant fit for the property.
Keep in mind that a single bad tenant can create a world of trouble. Make sure that your property manager has a screening process that can minimize the odds of this happening.
To find out more key questions when interviewing a prospective property manager, or to schedule a consultation, please get in touch with our office today!
