4 Questions To Ask When Hiring A Manager For Your Rental Property
Whether you own multiple properties or you have just purchased your first real estate investment, renting out a property can be a smart financial decision. As a matter of fact, recent studies have estimated the average return on investment is 9.06 percent. Market knowledge, negotiation skills, and even having skills to complete maintenance, updates, and repairs will increase profits and your success as an owner of an investment property. However, trusting professionals to manage your rental is also helpful especially if you have other obligations, such as multiple properties, a family, or full-time employment.
If you are a property owner, investing in a professional to manage your rental is wise. Here are a few questions to ask when searching for a qualified manager for your rental property.
What Services Are Offered?
First and foremost, you will need to ask a potential manager which services they offer. This is important if you require a wide variety of services or if you only need management to handle financial aspects.
For the best investment, consider a full-service manager that not only handles accounting, lease agreements, and rent collection, but also marketing and maintenance services. Investing in a full-service manager will allow you to reap the benefits of your investment property while focusing on other elements of your life.
How Many Properties Are Managed?
You will want your manager to be able to focus on your rental property as discussed. However, some individual professionals or management companies will have a large client base, meaning they manage multiple properties at one given time.
In most cases, managing multiple properties is possible, as long as the individual or company has the experience and skills required. Before hiring a manager for your property, make sure you have a clear understanding of your expectations and if they will be able to meet them.
Are Current Laws Understood?
Proper understanding of local laws is one of the most important qualifications of a potential property manager. When interviewing a potential manager, be sure to ask if they understand and are up to date on current landlord/tenant laws.
A qualified manager should understand the current city, state, and federal laws that apply to landlord and tenant relationships.
For example, a property manager should know and be able to follow the responsibilities of landlords in your local area. Knowledge on federal fair housing laws, handling security deposits, and terminating leases is also essential.
Lastly, managing your property will require extensive knowledge on the laws involving eviction notices, since each state have their own legal guidelines to follow. Some states require landlords to give 30 days' notice before beginning an eviction suit while other states require 60 days.
Ensuring your management knows and is capable of following the law will ensure you are protected in case issues arise between you and a tenant.
What Fees Are Charged?
Management for your rental property will be an expense, but it is important to think of this fee as an investment. Before hiring a manager, make sure to discuss these fees in detail, so you have a clear understanding.
In many cases, management will charge a percentage of your rental income to handle your property. This percentage should be based on rent that is actually collected instead of rent that is due. This will give your manager the motivation to make sure all tenants pay their rent in a timely manner.
Rental properties are excellent investments, but they require a great deal of time, money, and stress. By hiring a qualified, experienced, and knowledgeable property manager, you can enjoy the profits of your rental company with less time and stress.
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