Letting a professional manage your Torrance, California rental property is a great step towards running a successful rental business.
The right property manager understands the ins and outs of the local rental business. He has potentially managed dozens if not hundreds of other rental properties. As such, the manager will be better placed to advice you on the strategies that work.
For example, he can help advise you on what rental marketing methods will work for your property. As a result, this can help save you both time and money.
There is one major challenge when it comes to hiring a property manager. As with other professionals, not all property managers are created equal. Some are there to help you succeed while some are there to make money off of you.
How do you find the best property manager for your Torrance rental property?
It’s actually quite simple. You need to have questions ready for the interviews. Even without any experience managing properties, these can help you determine whether or not the individual is a good fit as the property manager.
1. What services do you offer property owners?
Pick a property manager who can handle a variety of services. Good examples of such services include property marketing, tenant screening, property repair and maintenance, and evictions.
If the property manager is only willing to handle one or two of these services, he may not be a good fit. You would be better off continuing your search.
2. Are you managing any property right now?
If the property manager isn’t managing any property, walk away. That’s a red flag. It may mean two things. One, the property manager has lost business due to poor services. Or two, he or she is just starting out in the property management business.
If the property manager is managing some properties, find some more information about that. The goal would be to find out just how many properties they are managing. If they are managing too many properties, you risk getting lost in the shuffle.
If they are managing too few properties, it may indicate they are just starting out.
You should ideally look for a property manager with a portfolio of between 200 and 600 units.
3. Do you have experience managing rental properties?
Don’t get tricked by how well designed their website is or how great their office looks. Looks can be deceiving!
Choose a property manager that has a wealth of experience based on two important things. One, the years they have been in the Torrance rental business, and two, how many properties they have managed.
4. Do you know how to set the rent amount?
If you have been in the landlording business for a while, then you understand how important charging the appropriate rent amount is. It attracts the right type of tenant and vice versa.
If a property manager doesn’t know how to set the rent amount, it’s a sign of trouble. Continue your search.
If they say they do, ask them how they go about it. If they don’t mention anything to do with ‘comparative market analysis’, walk away.
5. Have you made any investments in the Torrance real estate market yourselves?
Ideally, look for a property manager that has done so. They will most likely know the challenges of running a rental business there and how to overcome them.
However, if they haven’t invested themselves, chances are that they lack the core experience to help you succeed.
6. Is your management agreement inescapable?
As with any other business out there, there are some property management companies that employ rogue business practices. That’s why it always pays to read and fully understand any contractual agreement prior to signing it.
Understand the length of the contractual term, terms of the renewal of the agreement, and what happens should any party severe the contract.
7. How do you price your property management services?
There are generally two pricing options when it comes to property management. There is the flat rate option and the percentage option.
With the former option, it means that you’ll have to pay the property management company regardless of whether your property is occupied or not. So ask yourself – will the property manager have any motivation to find a tenant for your rental property?
In most cases, most likely not. Why should they bother themselves when they can just sit back and relax and still get paid?
The second option is the percentage of collected rent. With this one, it means that the property manager receives a percentage of collected rent. This is usually about 10%. So with a rental income of, say, $3,000 per month, you can expect to pay your property manager about $300.
The latter option is usually the most preferred by many property owners in Torrance. This is because it motivates property managers to ensure the property is occupied at all times. In other words, they don’t get paid if there is no tenant.
8. Are there any miscellaneous fees?
If the company is charging a very low monthly fee, think again. Remember, your property manager is there to make money.
If he’s not making it via the monthly fee, odds are that he’ll try to make it by charging lots of miscellaneous fees.
9. Will you carry out property repair and maintenance?
Buying a rental property is obviously a huge financial undertaking. As such, it only makes sense to hire a property manager who can regularly inspect it for damage.
There you have it. Best questions to ask a property manager before hiring.
Remember to only choose the one that meets all or most of your expectations.