Not sure how to find a good property manager?
If you’re considering property management solutions in Indianapolis, you may have heard mixed tales from landlords and real estate investors. Everyone loves a good property manager (PM) who saves them time at a fair price, but it’s vital to do your due diligence when interviewing potential property managers.
At WILMOTH Group, we know the positive impact a good property manager provides and what answers you need to make an informed decision. Here are 50 essential questions to ask a potential property manager, so you aren’t caught off guard during the partnership.
Property Management Specializations & Services
1). What is your specialty in property management?
Not all property managers specialize in the same area or property type. If you own a single family rental home in Indianapolis, you have different needs than a commercial real estate investor with offices. Search for a PM specializing in your niche.
2). How do you accept payment: flat fee or rent percentage?
Property managers may charge a flat fee or rent percentage (usually 8-12% of monthly gross rent). A flat fee is economical but excludes some services. When a property manager charges a percentage of the rent, they tend to do more and have a vetted investment in keeping the property occupied, since rent is their payment source, too.
3). Which PM services are included and which cost extra?
Understand which services are included in your contract, and request clarification on which services are fee-based. It’s common to see additional charges for:
- Answering tenant phone calls
- Coordinating repairs and maintenance
- Gaining access to the property manager’s contractors and specialists
- Inspecting properties periodically
- Receiving and depositing rent
- Updating lease agreements for legal compliance
Expect to pay more for a property manager who handles full repairs and maintenance. In exchange, you won’t spend your time collecting quotes, playing phone tag, or scheduling appointments. However, you may be required to provide a maintenance fund.
4). Are you a licensed and insured property management company?
Only work with licensed property managers who carry insurance.
5). How do you manage competing interests between properties?
A property manager’s real estate portfolio may include your competition. If you and other clients have vacancies, the PM needs a policy to ensure fair treatment of all parties.
6). Do you have tenant and landlord references?
You might find tenant reviews by looking at the property management company’s Google listing (and other social media websites). For property manager reviews by landlords, ask the PM if they have clients willing to speak with you. Another option is to reach out to local landlords and investors about their property management experiences.
7). Do you charge a fee for tenant lease renewal?
Landlords and property managers love long-term tenants. When a lease nears expiration, the property manager should have a process for sending reminders, informing tenants of rent increases, and renewing leases. You should know what kind of charge to expect for a lease renewal, if applicable.
8). Is a trial period available?
Ask if there’s a month-to-month contract for the first three months. This is a safer way to confirm you and a potential property manager are a good match. Ask the PM what to expect at the end of the trial. Can you retain them at the same rate for the rest of the year if they meet your expectations?
9). Is there a termination clause in the contract?
Life is unpredictable, and it’s possible you or the property manager will need to terminate the contract. Understand how long the contract is valid; when/how rate increases are determined/approved; and the fee for terminating the contract early. Note any circumstances that allow you, or the PM, to break the agreement prematurely.
10). How many properties do you manage?
The PM shouldn’t be spread too thin. Learn the number of properties they service.
11). How large is your staff?
The staff size should be appropriate for the number of properties managed. If understaffed, employees won’t be as attentive to clients and tenants. On the other hand, a staff that is too large raises questions about how much you’re being charged to maintain PM operations.
12). Do you own a home or rental property (or have you in the past)?
A PM who currently or previously owned property is familiar with what it takes to keep a home or rental functioning (and the unexpected events that occur). This experience means they may be prepared for events that other property managers wouldn’t consider.
13). Do you manage long-term and/or short-term rentals?
Some property managers are set up to handle short-term rentals and locate new tenants regularly while others specialize in long-term rentals. Make sure the property manager you choose is familiar with the types of rentals you have.
14). What sets you apart from the competition?
It’s good to know what the property manager believes to be their strongest assets.
15). Where are your opportunities for improvement?
A candid response will give you insight into whether the PM is right for you. Perhaps a weakness if a type of property they don’t currently manage but would like to in the future. They may be in the process of incorporating more technology into their business to make life easier for tenants and clients. Answers like these can be good depending on what you need from the PM and what you’d like to see in the future.
Vacancies at Rental Properties
16). How often are your rental properties vacant?
Ask about vacancy rates, so you have a data-driven understanding regarding how long your property might go unoccupied. Don’t accept vague answers; request metrics for your peace of mind (look to the competition if you receive indirect responses).
17). Are monthly fees ongoing if the rental property is vacant?
You may be responsible for payment when you’re not receiving rent. Choose a property manager who doesn’t charge during vacancies, or look for one who charges a reduced fee. Note: if the property manager is responsible for locating tenants, they should be compensated for this service.
18). Do you perform pre-inspections while the tenant is still there?
Some states allow a landlord or property manager to conduct pre-inspections before the tenant leaves. If any damage is discovered, it’s easier to discuss and resolve with the tenant while they are present than it is after they leave.
19). What do you charge for locating a new tenant?
Some property managers charge a fee or take money from the first month’s rent as compensation for tenant placement. Locating a tenant may involve paid listings, interviews, and application comparison.
20). How do you advertise a vacant property?
You need to advertise your rental property in the best light to attract new residents in record time. Review rental vacancy listings the PM manages. Read the description, and view the photos (the properties should be clean with high-quality photos). You need a PM who cares about finding the right tenants for your property.
21). How do you make sure tenants are well-qualified?
The property manager must be invested in securing good tenants. No one wants a PM who accepts an application regardless of the risk. Find out the criteria that defines a well-qualified applicant to ensure you’re on the same page. If you have concerns or red flags you’d like to incorporate, discuss them with the PM.
22). Do you rent sight unseen?
3D virtual tours are gaining popularity in the real estate industry, sometimes leading to properties going viral. Around 70% of renters say they would make a decision based on a virtual tour. However, there is risk for the renter and landlord/PM in choosing an applicant who hasn’t seen the property in person. There isn’t a large pool of data on sight unseen rental success rates at this time, but if the tenant checks all the boxes, this is a conversation you and your property manager should have.
Rent Collection, Payment & Evictions
23). How is rent collected, and when is it transferred?
If the property manager is in charge of rent collection, you need to know when you’ll be paid. On average, a PM accepts rent on the first and third of the month. After subtracting their percentage, the PM distributes the remaining funds into your bank account.
24). If tenants pay pet fees, etc., who keeps them?
A tenant may be responsible for late fees, pet fees, and other miscellaneous fees. The PM contract should detail who keeps these fees, so there are no surprises.
25). What’s your policy on late rental payments?
On-time payments are vital, especially when a third party is involved. To discourage tardiness, the PM should have a late policy, such as adding a 10% late fee for tenants. For residents who reach out due to family emergencies and unexpected job losses, you and the property manager should discuss the process. You may wish to work out an alternative schedule with both parties if the issue involves long-term renters who are historically in good standing.
26). How many tenants did you evict last year?
It’s important to know how many tenants the property manager evicts within a year. It’s possible the number has risen in recent years due to the pandemic and a volatile economy, but having this information is essential for making an informed decision (and knowing what to expect in the present-especially if competing property managers have similar numbers).
27). How long does it take to evict a non-paying tenant?
You need to know how long you’re likely to go without payment if you need to evict.
28). Do you offer refunds if you need to evict a newly placed tenant?
If the property management company is responsible for choosing tenants, you expect the tenant to be a good fit and not immediately turn into an eviction risk. Ask the property manager if they refund money or wave fees in this scenario.
29). What attorney do you use for evictions, or is it an in-house process?
Some property managers have an attorney for evictions while others have an in-house process. Attorneys understand nuances that in-house employees may not. If the PM doesn’t have an attorney or process, look elsewhere.
Property Managers & Legal Information
30). What’s your legal record–were you ever sued by a landlord or tenants?
Give the property manager an opportunity to explain any legal cases they may have been involved in previously.
31). Were you ever accused of discrimination during the screening process?
It’s essential that the property manager understands Fair Housing Laws. Give the PM a chance to explain the cause of the incident and the outcome.
32). Did the Department of Real Estate ever file an accusation or a complaint against you?
If the property manager has complaints on file, you should be able to view them via your local, Indiana real estate departments. Search for an online database of complaints. Note: this assumes a license is required by the state.
33). Have you ever been sued?
A tenant suing the property manager isn’t a deal breaker, but it is important to know how many times the property manager was sued and the outcome of the case(s). If the outcome was favorable to the PM, this is a good sign. Either way, give the property manager a chance to address their past and discuss the circumstances with you, so you can make an informed decision.
34). Are you familiar with Fair Housing Laws?
If a property manager isn’t familiar with Fair Housing Laws, don’t hire them. It is essential that your property manager knows applicant and tenant rights. They must follow a process that avoids discrimination.
35). Which Fair Housing Laws do other property managers tend to break?
This is a good way to test a potential property manager on their knowledge of Fair Housing Laws without being obvious. The PM should be able to cite a few laws that novice property managers may not know or understand.
Contact Information & Tenant Concerns
36). Who is the primary contact?
It’s essential to know the primary contact for you and your residents. Make sure there are secondary contacts and a phone number to use for after hours for emergencies.
37). Is the tenant lease auto-renewed?
Are tenants given the option of auto-renewal, and how does the process work?
38). Is the contract between us auto-renewed?
You also need to know if your authorization is required each year to renew the agreement with your property manager.
39). How much move-out notice is required by tenants?
If tenants choose to leave, how much notice are they required to give?
40). How do tenants reach out?
Do tenants have ways to reach out for assistance outside of calling the primary contact? Is there an online portal where they can pay rent, renew their lease, or announce their plans to leave within a given timeframe?
41). What is the communication timeline?
How long does it take for someone to return a tenant’s call, and how long does it take for someone to return your inquiry? In general, responses should be provided within 24 hours or less, and both you and your tenants should have after hours, emergency contact numbers and protocols.
Property Repairs & Maintenance
42). What rules are in place regarding repairs?
The repair processes will differ between property managers. Ensure you know the protocol, and set expectations. Understanding the repair process will reduce stress for you and your tenants.
43). Do you handle all repairs or do I need to authorize them?
You may wish to provide a fund the PM can use in the event of a repair. If a repair will cost higher than a set amount, you may ask the property manager to contact you first.
44). How are repairs tracked?
Learn how the property manager tracks maintenance and repair requests, and find out if this information is accessible online for you or if you need to call in for it.
45). What is the process for emergency repairs?
Find out the tenant process for an emergency repair. Are they allowed to call someone (or choose from an approved list that includes 24-hour contractors)? Should they contact you or the property management company first?
46). What constitutes an emergency repair?
Not every repair requires immediate attention. However, there may be a difference of opinion between you, the property manager, and the tenant. Ensure you are all on the same page regarding the definition of an emergency repair.
47). Do you require the use of your contractors?
A property management company may have partnered with specific contractors and require their employment for repairs and maintenance. Others may allow you to choose your own contractor so long as they meet certain criteria (for example, they are licensed).
48). Do you need a maintenance reserve?
The PM may require a maintenance reserve.This allows the property manager to use its funds throughout the year for property upkeep, reducing the need to contact you. If there is a maintenance fund, find out when you’re expected to replenish it. You need to know what to expect on your end with all costs.
49). Are contractors licensed, bonded, and insured?
All contractors should be licensed, bonded, and insured. Period.
50). What requires pre-authorization to change?
If the tenant wishes to paint the walls or install LED wall lights, are you able to pre-authorize those changes? Discuss how pre-authorization works, so you can save time.
WILMOTH Group provides property management services in Indianapolis. Our knowledgeable team is happy to answer these questions and others you have. If you’re looking for a property manager in Indianapolis, contact us at (866) 945-6684 to learn what we can offer you and your tenants.
Thank you for your consideration. We hope these 50 questions to ask a potential property manager are of value in your search.