Hiring a good property management company for your rental property is one of the most important investment decisions you can make. It can mean the difference between making money and growing your real estate investment portfolio or losing money and having to deal with lawsuits that make you never want to own rental homes. Here are a few questions you should ask when you’re interviewing companies:
What is the average amount of time properties are listed before you get a tenant?
Right answer: It depends on how well your property shows and the time of year, but it should take less than 30 days to find a qualified tenant.
Wrong answer: If they find tenants too quickly this can be an indication that they price properties below market value or have low rental application approval criteria.
Will you let me choose the tenant or be involved in the tenant screening?
Right answer: No, we handle that and use the same criteria to approve or decline all applications.
Wrong answer: Yes, we’ll contact you first to see if you want to approve or decline the tenant application.
Reason: Most owners are not familiar with fair housing laws and may unintentionally discriminate. You probably don’t process hundreds of applications a year and might want to be too strict (require 800+ credit score) or too lenient and willing to accept tenants who may have issues paying rent and fulfilling the lease terms.
What happens if a tenant stops paying rent?
Right answer: We serve them with a notice and if they haven’t paid by the expiration date on the notice, we proceed with an eviction.
Wrong answer: We contact you to see what you want to do.
Reason: You don’t want a company that tailors their late rent collection process to what you want to do for multiple reasons. Many owners will feel bad for tenants and say they want the management company to give them more time to pay. Unfortunately, this usually leads to a situation where the tenant just digs a deeper and deeper hole until it’s impossible for them to get out of it. They eventually end up moving out and owing thousands of dollars to the landlord which the landlord rarely can collect.
Do you contact me first when a tenant requests a repair?
Right answer: It depends on the issue.
Wrong answer: Yes, we will contact you before doing any repairs at the property.
Reason: Some maintenance issues are health and safety issues and contacting you first can put your tenants in jeopardy. It can also cause additional damage to your property. For example, let’s say a sink backs up and starts overflowing on the second floor. Every minute that sink is left it causes more water damage to your floors, cabinets, and everything below it. A property management company that agrees to contact you first puts itself in a dangerous position. What if you’re on a plane or in a meeting and can’t answer for a couple of hours? That’s why you hired them to begin with.
How many evictions did your company do last year?
Companies should have this information available and be prepared to answer this question. If a company has a lot of evictions, they probably have low standards for approving tenants. For an eviction to happen, usually the tenants have paid rent late on multiple occasions and there are more expenses to get the property ready for the next tenants since tenants who are being evicted rarely bother to clean or remove all their personal items.
Ultimately, you should go with a property management company that feels like it’s a good fit for you. Just make sure you choose one that’s knowledgeable and experienced and has an established track record in the community. Give us a call if you have any questions about how we manage homes in Seattle.