What to look for in a Property Management company

The benefits of hiring a property management company are apparent to anyone who has tried managing rental properties all by themselves. Property management companies and property managers offer a host of services, from screening tenants to creating property management reports. However, not all property management companies are the same.

We have compiled a list of the most important things to look for when choosing a property management company.

Experience

Yes, while this may be obvious, we still want to ask if the property management company has the relevant experience for your property before you sign the contract. Below are the three main areas with respect to property management experience:

Property type – Has the property management company dealt with your property type before? For example, the property manager managing a condo will need to understand typical condo by-laws. A property manager for a house will need to understand general maintenance that’s required in a home. A property manager for a multifamily apartment will need to understand how the building operates.

Tenant issues – What types of issues have the property management company dealt with? You can ask the property management company what their worst tenant experiences were and how they handled them. This will give you a good idea on how well they deal with the problems that arise.

Legal issues – Have they had to evict a tenant? Have they dealt with rent collection issues? Have they been to a tribunal on behalf of the landlord? These types of issues are the most stressful for a landlord and having someone with experience can help alleviate the stress.

Cost

Property management services have flourished because they help property owners cut costs in various aspects of managing and renting a property. The overall savings make sense even after deducting the fees charged by your property management company.

However, some property management companies can charge a lot of money depending on the services they provide. Evaluate how many services you need and how much you are willing to pay for the overall investment to be profitable. If a particular company doesn't satisfy your criteria, look for an alternative.

At the same time, surprisingly low charges may be a tale-tell sign. So if you come across very low charges and fees, do proper background research before committing to the company.

The typical cost of a property management company depends on how hands on your property is. A furnished unit catering to higher end clientele can take a larger fee than a unfurnished rental unit. Property management fees in Canada can range from 4% to 15%. The property management company may also charge a fee for managing cleaning, repairs and maintenance.

Remember that your ultimate goal is to maximize profits. Sometimes, you can make more profit by going for a better property management company instead of a cheaper one.

End-to-end property management

An ideal property management company should offer end-to-end property management services. That is, they will take care of everything from finding tenants to creating agreements to the maintenance of your property. If your property management company doesn't offer a full range of services, you should consider looking for an alternative. Taking on parts of the rental process can lead to finger-pointing between you and the property management company.

Testimonials

We look for customer reviews and testimonials even when buying something cheap from Amazon. Why not do the same for your property management company? Looking at reviews and testimonials is the best way to learn about the performance of a property management company. If not anything else, it'll give you a better idea compared to what the company will say about itself.

Pay attention to the negative reviews. Are the negative reviews from the company being negligent in what they are responsible for? Or is it just an upset tenant trying to get back at the company when the company was doing its job?

Customer service

A property management firm should be proactive and quick with support to both you as the landlord and to the tenant. As a landlord, you will have many questions regarding the practices and strategies of your property management firm. If you don't get timely and accurate responses to your queries, start looking for an alternative. If you as the landlord are not getting timely responses then you can be sure that the tenant is not as well.

License and registration

Some provinces require property managers and management companies to be licensed and registered. Make sure you don't go for an unlicensed or unregistered service provider if you live in one of these provinces.