8 Critical Questions to Ask Before Hiring a Property Management Company

Hiring a property management company (‘PMC’) can be one of the best moves you’ll ever make, but it’s not a decision to be made blindly. Finding a company who will treat your investment as a part of their own portfolio and who will work diligently to not only protect your investment, but also to increase your ROI is the goal. That being said, consider the following eight questions to be a critical part of choosing the property management company who goes to work for you.

1. Is the company investor-owned and investor-focused? A property management company that’s investor-owned and focused makes a tremendous difference from those that aren’t. Not only does the owner’s first-hand experience in real estate investing play an important role, but it aligns the PMC’s goals with your goal of maximizing returns on investment. This alignment leads to better decision-making, increased efficiency, and ultimately, higher profitability for you, the investor.
2. Do they offer rent-ready preparation services? A PMC that has rent-ready procedures in place for their clients is striving to streamline the tenant turnover process. This effort in efficiency plays a vital role in reducing the amount of time that a property is vacant between tenants and reduces lost rental income.
3. How detailed and transparent is their financial reporting? Consistent, detailed and transparent financial reporting not only fosters trust, but it allows you to understand the financial health of your investments, enables informed decision-making and ensures accountability.
4. What’s their tenant screening process like? How thorough is their tenant screening process? This question is important for obvious reasons, but in short, a strong tenant screening process is crucial in order to identify reliable tenants, minimize risks, increase the likelihood of timely rent payments, lessen the probability of property damage, avoid costly evictions, and maintain the value of your rental property.
5. How do they collect rental payments from tenants? A simple and streamlined rental payment process benefits the tenant, the PMC and the investor. The tenant appreciates a quick and easy way to submit their rental payment while the PMC and investor view it as a way to encourage consistent cash flow, reduce administrative burdens, and minimize errors. It can also allows for better financial management, compliance with regulations, and improved efficiency in handling late payments or disputes.
6. How are maintenance requests submitted/handled? A dependable process for receiving maintenance requests is key to tenant satisfaction and stronger tenant retention rates. A good property management company will have a system that ensures timely responses and timely, effective solutions. This efficiency prevents minor issues from escalating, plays a large part in protection of the property as well as in the safety of the tenants.
7. What do their eviction procedures look like? Understanding a PMC’s eviction process is crucial to protecting your investment and minimizing potential losses. A well-defined and legally sound eviction process ensures a swift and efficient removal of problematic tenants while reducing financial and legal risks. You want to ensure that a company is capable of handling challenging tenant situations appropriately if/when necessary.
8. Can they advise you on acquisitions and scaling? Though you may not need it at the very moment, it’s important to know if a property management company can advise you on acquisitions and scaling. You most definitely want a strategic partner who can actively contribute to the growth and profitability of your real estate portfolio. The more you can keep in one house (ie. maintenance, rent collection, marketing, lease execution, financial reporting, eviction, tenant screening, and acquisition) the better!

Twenty years of personal real estate investing and we can tell you, first-hand, that not all property managers are created equal. As a matter of fact, that’s exactly how Aligned Property Management came to be. After numerous failed attempts to find an honest and reliable property management company, we finally decided to start our own. We know the PMC services and quality of services that were non-negotiable for us and that’s exactly what we bring to our clients.

I was introduced to Aligned Property Management while seeking an alternative management after years of mediocre performance and opaque communication from my previous management. APM took over my properties and we uncovered they were in distress and the situation was far worse than we thought. Four months later and the properties were all performing again and are in the best condition they have ever been in. APM’s team took on a hard situation with grace, determination, and performed with experience. I can firmly say, if you are looking for property management, Aligned Property Management is the best choice. – Jon C.