Tips on Choosing a Property Management Company in California
Your rental property is an asset that requires proactive and professional management to ensure that it is properly protected. You wouldn't let your neighbor's friend manage your stock portfolio (unless, of course, she's a real portfolio manager). Likewise, your property requires a licensed, experienced investment property manager who is responsive and transparent.
Choosing the right investment property manager can be an overwhelming task, especially if you are a first-time landlord. What qualifications are you supposed to be looking for? How do you sort out subpar investment property managers from those who protect your investment as if it were their own? Here are some tips to help you in this regard.
1. Search for specialized experience
Property management is a complex sector. You want an investment property manager who is at the top of current federal, state , and local legislation. And you want someone who has a proven record of dealing effectively with the many variables that come with tenants and homes.
Look for a property management company with extensive experience working on your specific type of investment. Companies that focus on commercial properties , for example, may not be equipped to manage residential properties properly.
Last but not least, avoid real estate agents that moonlight as property managers to make extra money on the side. If they have not acquired specialized training, they will not know how to properly manage your investment and are less likely to be up to date on the relevant laws and codes.
By Stacey Baca - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=12222368
2. Get Referrals from people you know
Word of mouth is a great way to find a good property management firm for your rental property. Beware, however, that the person you are asking for a referral may be biased towards a company or service. So it's a good idea to ask for a referral from many different sources to a company that is ideal for your needs.
3. Check Online
The Internet is a good place to search for property managers in the area where your property is located. Once you've found a few of these companies, you can also check their ratings and reviews to choose the company you think will be perfect for your rental property business.
4. Verify professional licenses and certifications
In some areas, you may find people managing properties with only a real estate license, and a few states do not require a license of any kind. Competent property managers and management companies should be able to back up their technical expertise with proper licensing and professional certification. Check with your state real estate commission to see if the property manager's real estate broker's license is up to date. Any professional affiliation and certification is a plus.
There are a number of trade organizations that offer certifications upon completion of rigorous training programs, exams, and portfolio and reference reviews:
- Members of The National Association of Residential Property Managers (NARPM) generally focus on single-family homes and small residential properties.
- Managers who complete their initial training and vetting process receive the Residential Management Professional (RMP) designation.
- After taking additional classes, more experienced managers can attain the demanding Master Property Manager (MPM) designation.
- Companies that have demonstrated the highest levels of professionalism may also apply for the Preferred Residential Management Company designation (CRMC).
5. Organize interviews with a few shortlisted companies
It is necessary for you to meet your requirements on one basis and to learn about the views of the companies. An in-person meeting will reveal many new aspects of the property management company, while you will also learn about their terms and conditions. It is easy to make a decision in favor of a company based on your findings from these meetings.
6. Learn about how the company handles vacancies
Vacancies can prove to be a big headache for you as the owner of a rental property. Some property management companies charge a fee for the total number of units, while others do not charge a fee when the unit remains vacant. You should also ask how the property management company advertises and rents vacant units in your rental property before finalizing the property management agreement.
7. Examine the agreement on property management
The property management agreement outlines the business relationship between you and the property manager and outlines the tasks and responsibilities of the management team. Given the seriousness of the contract, it is up to you to read it carefully and make any necessary amendments before you sign the contract. Confirm that it covers everything you want and that there are no objectionable clauses.