What to Know Before Hiring a Property Manager
I recently had a reader write in to ask about property managers. They own a home in Montana and are relocating to the East Coast for work and family reasons. Instead of selling their home, they decided to rent it out since they have a very low mortgage rate and want to diversify their finances. They asked me how to find a good property manager, what questions to ask, and what to expect in the process.
This is a great question because choosing the right property manager can make the difference between a profitable, stress-free rental and a situation that turns into a nightmare.
Where to Find Property Managers
Start with referrals. Ask friends, family, or colleagues if they rent and have had good experiences. You should also ask your real estate agent who helped you buy the property for recommendations. Beyond referrals, an online search can help you identify local property managers. Once you have a list, set up interviews and have them visit your property so you can see how they present themselves.
Tenant Screening and Marketing
The most important thing to ask is how they screen tenants. Do they run credit and background checks? How do they verify employment and rental history? Also, ask how much involvement you will have in choosing tenants. Even if you prefer your property manager to handle most of the process, I recommend having some level of input.
Marketing is just as important. Ask to see examples of their rental listings. Do they use professional photos? Do they advertise across multiple websites and platforms? A property manager who takes marketing seriously will attract better tenants faster.
Maintenance and Inspections
A big part of property management is maintenance. Ask how they handle repair requests. Do they have a network of reliable contractors, or do they upcharge for coordinating repairs? Some companies tack on 10% to 25% on top of contractor costs, while others pass the bills along directly.
Inspections are another important piece. Ask how often they inspect the property and whether they perform routine checks, such as furnace filter changes or lawn care oversight. You want someone proactive, not reactive.
Fees and Financials
Most property managers charge between 8% and 12% of the monthly rent, with 10% being the most common. If a company is charging significantly less, ask what services might be excluded.
Also, understand what extra fees exist. Will they charge for tenant placement, lease renewals, or marketing commissions? Ask when they send rent proceeds to you after tenants pay and how expenses are deducted. Many new landlords assume maintenance is included in the management fee but it is not. Be clear about what is covered and what is not.
Communication and Transparency
Set expectations about communication from the beginning. How quickly do they respond to your calls or emails? Do they provide monthly financial statements or an online owner portal so you can track income and expenses? Clear and regular communication is essential, especially if you are living out of state.
Legal Knowledge and Compliance
One area landlords often overlook is compliance. A good property manager should understand local landlord-tenant laws, fair housing rules, and state-specific regulations. They should handle security deposits correctly, know how to serve notices legally, and guide you if eviction ever becomes necessary.
Insurance and Liability
Ask your property manager about insurance requirements. Many companies require landlords to carry landlord insurance instead of a standard homeowner’s policy. Also ask if they carry errors and omissions insurance or general liability coverage in case something goes wrong under their management.
Exit Clauses and Flexibility
Finally, review the management agreement carefully. What happens if you are unhappy and want to terminate the relationship? Look for a clear cancellation clause. Some companies lock you into long-term contracts with heavy penalties for leaving. A fair agreement should allow you to end the relationship with proper notice if it is not working out.
Final Thoughts
Property management is still a very personal business. Technology can help with things like payment collection and tenant communication, but at the end of the day you are hiring a team to represent you, protect your investment, and maintain good relationships with tenants. Take your time when interviewing, check references, and make sure their personality and communication style fit with yours.
If you are considering buying a property to rent out or need help finding a property manager, I have contacts across the country and would be happy to connect you with a trusted professional.
