How to Pick a Good Property Management Company

What factors do you think are important for selecting a property manager?

Here are some of my thoughts:

According to a 9 News (Denver) article written by Jeffrey Wolf and Jace Larson on Tuesday, January 5, 2010, there have been numerous complaints filed with the Colorado Real Estate Commission, by homeowners who entered into contracts with Mile High Management and claim the property management company never paid homeowners rent money collected from tenants. See full article at: www.9news.com/news/article.aspx?storyid=130191&catid=339

I think this situation really highlights the importance of picking a good, reliable, and reputable property management company when searching for someone to manage your valuable rental property assets.

For owners/landlords, I think someone should evaluate at least 2-3 companies before deciding which one to use. In addition, I think they should check references.

FIVE KEY FACTORS, in my opinion, are:

1. REFERENCE CHECKS

a. If you find other owners/landlords that are very happy with a particular property management company, that is a very good sign.

b. It is an even better sign if the reference is from a friend or acquaintance of yours.

2. LEASE AGREEMENTS: making sure they know all the local & state laws that affect property management

a. Are they members of the local chapter of the National Apartment Association (NAA) and/or the local chapter of the National Association of Residential Property Managers (NARPM)?

b. Make sure you review a sample copy of the lease agreements they will be using.

3. MONEY MATTERS: costs & dealing with money matters

a. What fees will they charge you?

b. What services do they provide?

c. How and when do they pay you your income?

d. Do they give you periodic financial reports/statements?

e. Do they use their own maintenance people? If so, how much do they charge you for using their maintenance people?

f. Will they contact you for approval if a repair will cost more than a certain amount of money?

g. What do they charge you for dealing with filling your vacancies?

h. Do they require you to maintain a reserve account?

4. TERMINATING YOUR RELATIONSHIP WITH THE PROPERTY MANAGEMENT COMPANY

a. If you are not satisfied with the property management company, can you terminate your agreement with them at any time?

5. ADVERTISING & COMMUNICATION

a. How and where do they advertise your property?

b. How will they communicate with you (e.g. phone, email, website, etc.).